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Results 51–100
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Character Traits of the Great Investor Sir John Templeton
by Kendall Anderson of Anderson Griggs,
There is a great advantage in living with a psychologist. When the world seems to be acting irrationally, or when a fear of loss takes hold of my mind, the psychologist couch, which in my case is conveniently located in my living room, serves a purpose well beyond the Sunday afternoon nap. It is where I can hear soothing words such as: “You have been through this time and time again.” “You have prepared for this, and you have explained to all of your clients that this can happen.” “This too will pass.”
Common Sense Trumps Smart Beta
by Kendall Anderson of Anderson Griggs,
Every few years or so the powerful money men of Wall Street come up with a new idea they believe will lead to unimaginable wealth for their clients and themselves. These ideas often stem from rigorous statistical studies which attempt to confirm that a particular idea offers better than average returns to investors. Of course, in the world of academia, any believable idea originally promoted by one researcher will quickly be followed by additional research from academics around the world expanding on, reinforcing, or contradicting the original study.
Earning an Illiquidity Premium in Private Credit
With low yields and tight spreads prevalent in traditional liquid fixed income markets, many institutional investors are considering whether higher returns are available by assuming credit risk in private or illiquid form. We believe this type of alternative credit strategy may enhance portfolio returns, but investors should be extremely judicious when giving up liquidity, particularly today.
That Silly Mr. Market
by Kendall Anderson of Anderson Griggs,
I’m sure you remember my friend Mr. Market. He was introduced to me a few years after I entered the business of investment advice via Ben Graham’s book The Intelligent Investor, and for most years since I have found him to be quite fair and reasonable. Whether I wanted to sell or buy any one of the thousands of securities available to the public, he would make an intelligent opinion of its value and proceed to close the deal at that price.
Key Themes for Navigating Credit Markets in Alternatives Strategies
by Joshua Anderson of PIMCO,
Against a backdrop of low volatility and tight spreads, 2014 turned out to be a challenging year for many alternative investors as they watched their trades become crowded, and reverse quickly when expected returns were not realized. One such example was the positioning among investors in advance of the European Central Bank’s (ECB) Asset Quality Review announcement; many had increased their exposure in anticipation of a tightening of European bank-related securities.
Regression to the Mean
by Kendall Anderson of Anderson Griggs,
I often hear from many of you that you know very little about investing. However, I find that most of you understand investing quite well. Many of the concepts and theories thrown out by those of us who claim to be professionals can be restated into words and phrases you use regularly. For instance, when you say, what goes up must come down, or, when you are going through a particularly tough time, dont worry, things will get better, you are showing your knowledge of regression to the mean.
The Evaluation of Common Stocks
by Kendall Anderson of Anderson Griggs,
I have met many financially secure families over the years. Most earned this financial security by working hard, while saving as much as possible, for a very long time. Some inherited a safety net, some married into wealth, and a few lucky people just did everything right at the right time. What I have not come across is anyone who gained financial security quickly in a short period by investing in the capital markets. I know there are a few of these wonder kids somewhere on the planet, but I havent met them.
Bear Markets, Corrections, and Benchmarks
by Kendall Anderson of Anderson Griggs,
Since the last day of 1926 through today, the S&P 500 has had a total of eight bear markets. This is assuming a bear market is one with a decline of 20% or more. Since it has been eighty-five years since the first of these great bear markets, and five since the bottom of the last one, it might be interesting to see some details on each. Lets take a trip down memory lane.
John Templeton’s 22 Maxims for Investors and 6 Factors for Analysts
by Kendall Anderson of Anderson Griggs,
John Templeton was one of the greatest mutual fund managers of the 20th century. The Templeton Growth Fund was established in 1954. From then until Mr. Templeton sold the fund in 1992, a $10,000 investment with dividends and capital gains reinvested would have grown to $2 million.
Late, Not Lost: The Economic Drag From the Millennial Generation
We believe concerns of a student debt "bubble" and perpetual financial weakness among Millennials are largely overstated. Understanding Millennials' financial trajectory is critical to our secular (3-5 year) outlook for home prices and the broader economy. We expect Millennials' financial position to improve, and pent-up demand could result in longer-term strength in housing and housing-related assets.
Frustrations of a Frugal Investor
by Kendall Anderson of Anderson Griggs,
The other day I was leaving the office and a gentlemen who has known me for quite some time asked about the model year of my truck. I told him it was a 2001 and that it should still be good for another 100,000 miles. Of course my truck is known to me and many of my friends as Big Red, and it has become a family member of sorts, capable of and willing to take on any job, rather than just a truck that hauls things around.
Five Reasons to Buy and Hold Shares of Great Companies
by Kendall Anderson of Anderson Griggs,
The world is full of stock traders. They firmly believe that they can trade stocks and create unlimited wealth for themselves and their families. These traders could be your neighbor, your co-worker, your physician, your lawyer, and even your CPA. But traders can also include professionals entrusted to take care of other peoples money. They are mutual fund managers, managers of pension plan assets, managers of separate accounts, and hedge fund managers, many of whom you would think know better.
The Prudent Investor’s Approach to Retirement Income
by Kendall Anderson of Anderson Griggs,
Each day, ten thousand people reach the age where retirement is a possibility. For some the choice is optional, but for others it is mandatory. A lively debate is taking place among academics and professionals in the investment industry regarding what the proper approach is for meeting financial needs in retirement.
The Crossroad
by Kendall Anderson of Anderson Griggs,
As summer peeks around the corner, a machine with two wheels is silently calling me, telling me that a new adventure awaits. This machine stirs up memories of past adventures, which builds in me a desire to head out to places unknown. I know that before summer ends I will answer its call, but for now I will just have to relive a few moments from trips past.
Views of the Insane on Diversification
by Kendall Anderson of Anderson Griggs,
I recently read this quote from Craig L. Israelsen, a Financial Planning contributing writer in Springville, Utah. Granted, I have never met, nor have I had any conversations with Mr. Israelsen, but he seems to be a competent professional. According to his bio, he is an executive in residence in the personal financial planning program in the Woodbury School of Business at Utah Valley University. However, his statement still bothers me a bit, as he is saying that any other investment approach must be insane.
Our Five Year Forecast Beginning February 20, 2014
by Kendall Anderson of Anderson Griggs,
Late last month I took on the role of judge, not in a court of law, but in a university competition, the CFA Institute Research Challenge Southern Classic. My task was to choose one of fourteen teams from South Carolina, Georgia and Alabama universities to go on to represent their region in the Americas Regional bracket of the CFA Institute Research Challenge. The challenge gives university students from around the globe an opportunity to gain real-world experience as they assume the role of a research analyst
U.S. Housing: Investors Reach for Higher-Hanging Fruit
PIMCO expects house prices to transition to steady secular growth, with nominal price increases of 5%?10% cumulatively over two years. An environment of reduced volatility and steady gradual growth may result in tightening risk premia and spreads as the market begins to price in this new dynamic. Over the coming years, we will focus on whether the underbuilding of single-family homes is ultimately resolved through housing starts, rental growth or continued price appreciation.
Monthly Letter to Our Clients & Friends
Although the rest of America may need a manufacturing revival, mutual fund manufacturing is not in need of help, as the business has been growing continuously for three decades. Because of the sheer number of funds and the amount of investment dollars they control, there is a very high probability that we are buying new positions and selling existing positions to one or more mutual fund companies.
Why Investing in High Quality Companies is More Important Today than Ever
by Kendall Anderson of Anderson Griggs,
One of the first rules a new financial advisor learns is that success in the business has nothing to do with how well your clients do in creating or maintaining wealth. Success is measured by how much wealth the advisor creates for him or herself. The same rule extends beyond the local advisor to the great halls of institutional management.
The S&P 500 Has Not Been Particularly Difficult to Beat
by Kendall Anderson of Anderson Griggs,
I know this statement is in direct conflict with the teachings of modern finance. Modern finance provides us with multiple studies that, if taken at face value, offer a pretty convincing case that the ability to earn better than average returns is a fools game. Yet, our human nature cannot accept being average.
Economic Update: August 2013
by Lori Liffring, Michael Bridgeman, Gaylan Abood, Justin Anderson, Karen Benefiel of Cambridge Advisors,
Stocks had another strong month in July with the large-cap S&P 500 index up 5.0% and the small-cap Russell 2000 up 7.0%. International stocks in developed markets were also 5.2% higher as measured by the MSCI EAFE index while emerging market stocks were up less than 1%. Bond prices stabilized during the month resulting in only a slight 0.1% gain.
Investment Advice Technology and How to Lose Money in the Coming Years
by Kendall Anderson of Anderson Griggs,
Adventures are good for my soul. They create wonderful memories, both of where I have been and all the effort it took to get there. All of us have memories, both good and not so good. I am a bit worried about the near term future.
A Five Question Portfolio Check Up
by Kendall Anderson of Anderson Griggs,
If the stock or bond market has another panic attack and drops 25% to 50% in the next 1, 2 or 3 years, would this decline make you unable to pay off your mortgage, pay for college, or whatever else you planned on doing? If the stock or bond market has another panic attack and drops 25% to 50% in the next 1, 2 or 3 years, would this decline cause you to: panic, sell everything you own, or worse, jump off a bridge? Do you know what you own? How important is the result of your portfolio entrusted to us in light of your entire financial well being?
June Economic Update
Stocks sold off on the last day of the month but still managed to finish higher in May with the large-cap S&P 500 index up 2.2% and the small-cap Russell 2000 up 4.0%. International stocks finished the month lower with the MSCI EAFE index down -2.9%. Bond prices came under significant pressure as yields rose after Fed Chairman Ben Bernanke hinted that Quantitative Easing may be tapered off sooner than the market expected. The 10-Year US Treasury Yield rose sharply to end the month at 2.16%.
Hold Your Houses: The Housing Recovery May Take Longer Than You Think To Reach Consumers
New residential construction needs to double from 2012 levels to meet long-run stable demand, and the pace of that increase is critical. Consumer credit growth is hindered by strict lending standards, continued deleveraging and limits to mortgage equity withdrawal. As a result, the balance of mortgage debt is unlikely to meaningfully increase in the next 12-18 months, delaying a return of the virtuous consumer cycle.
Monthly Letter to Our Clients and Friends
by Kendall Anderson of Anderson Griggs,
It has been years since we have seen new highs on the Dow Jones Industrial Average and the S&P 500. Although the wait can be traumatizing, its nice to get proof that market prices ultimately recognize growth of business value.
Learning from Douglas H. Bellemore One Great Teacher and Investment Counselor
by Kendall Anderson of Anderson Griggs,
Sometimes, I think those of us in the investment business strive to obtain the abilities of Star Treks Mr. Spock. Spock, the half-human half-Vulcan, learned to ignore the human emotions buried inside his self and use logic in order to solve the problems before him. Just think, what great investors we could be if we could simply control our human nature. As a Vulcan, we could construct an investment portfolio that would produce higher returns than any human could produce.
Our Five Year Forecast
by Kendall Anderson of Anderson Griggs,
We believe that predicting short term swings in the market is an exercise in humility. Longer-term market predictions can have some value, but they should be based on a form of valuation methodology of the underlying securities which make up the market of choice, and a consideration of the current mood of the market participants should also be included.
Intrinsic Value from Ben Graham to Anderson Griggs With an example; Emerson Electric (EMR)
Ben Graham may not have been the first to use the term intrinsic value as a form of analysis for stocks and bonds. But, through his teachings and the successful application of this approach by his many students and practitioners (including Warren Buffett, John Templeton, Seth Klarman, Mason Hawkins, Howard Marks and yours truly) he is given the credit. Understanding the concept of intrinsic value is necessary for an intelligent investor. Without understanding intrinsic value, its offspring, margin of safety, has no meaning.
Bond Market Primer
by Kendall Anderson of Anderson Griggs,
For years, our tag line "Common Sense Portfolio Management for Intelligent Investors" has served us well. There are times, though, that "Common Sense" can steer us in the wrong direction. Take driving. When a teenager sits behind the wheel of a car for their very first attempt at driving they know, from years of watching Mom and Dad drive, that when they want the car to go to the right, they turn the steering wheel to the right. Even someone who has never driven an automobile knows this. It is common sense.
Monthly Letter to Our Clients and Friends
by Kendall Anderson of Anderson Griggs,
Warren Buffett, Ben Graham's most famous student has said, "[Ben Graham] also taught me to see a stock not as something with a ticker symbol that wiggles around but to think about it as part of a business. Dont get elated because something had gone up or depressed because it went down. If I knew the facts, and it went down, I bought more of it". Although these two forces of investment beliefs are in constant battle, there is one common belief; Both believe that any attempt to "time the market" is not an intelligent approach to investment management.
September Economic Update
August was characterized by relatively low volatility as stocks continued to grind higher and bond yields traded in a fairly narrow range. The economy saw little change as the slow growth theme continued. European officials mostly took the month off so the sovereign debt crisis fell off the radar for the month. Politics have dominated the headlines, but a close race hasn't provided an impetus for investors to make significant portfolio changes.
Behavior Modification
by Kendall Anderson of Anderson Griggs,
The last few years have caused a number of us to modify our financial behavior. It is hard to believe that the financial crisis is over five years old. According to S&P Case-Shiller, the good times ended in June of 2006 when home prices peaked. By April of 2007 the big subprime mortgage lender New Century Financial Corporation filed for bankruptcy.
Taking Short Cuts to Higher Returns with AQRs Capital Antti Ilmanen
by Kendall Anderson of Anderson Griggs,
On November 2-3 of 2011 the CFA Institute and CFA France sponsored the Fourth Annual European Investment Conference in Paris, France. Antti Ilmanen, Ph.D. was one of the presenters. The title of his Presentation was Understanding Expected Returns. This months letter is based on this presentation as it appeared in the June 2012 publication CFA Institute Conference Proceedings Quarterly.
Restoring Trust
Conflicts always exist between clients and managers. Requiring full disclosure is a step in the right direction towards minimizing these conflicts. Rules alone will not be enough to restore trust between you and those of us who considered themselves professional advisers. My suggestion is that all advisers live their life, both professional and personal under an older rule than the current body of laws. That rule is Do unto others as you would have them do unto you.
Benjamin Graham's The Intelligent Investor: Chapter Eight
There are only five pages dedicated to bonds in Chapter Eight. But, these five pages had such major influence on my early years as an advisor. And once again, it is those pages that are sending me a reminder as to why I should not buy bonds today. Given the current interest rates, I would strongly suggest any and all bond investors read these pages. I can assure you that Mr. Buffett has.
Our Five Year S&P 1500 and Sector Forecast
Emotions are and will continue to be the drivers of short-term demand for stocks and bonds. At the individual stock level, we believe we can isolate certain human traits which drive this demand. However, at the broader market levels, we believe that the method to judge emotions is more intuitive than quantitative. In other words, it pays to be somewhat of a contrarian and to try not to become a member of the Buy High/Sell Low Club. History of markets can be a helpful guide to understanding the emotions that have driven previous investor buying decisions after major market declines.
A Tribute to Dr. Irwin Jacobs and Qualcomm
Any business cannot survive without more cash coming into the business than is being spent. For many new companies, especially technology companies, when the cash ran out they would just close the doors. Not for Dr. Jacobs and his fellow owners. When the cash ran out, they chose a different route to stay afloat, one that was contrary to accepted business practices and possibly the most important contribution any company has made in the development of the wireless industry. Their solution was to license all of their patents as a portfolio in return for a royalty payment.
Tide Turns for Structured Credit
Many investors remain skeptical, but the market environment for structured products has changed markedly since the financial crisis of 2008.
Current pricing now reflects a more realistic view of the underlying fundamentals, including weakness in the global economy and U.S. housing market.
We believe now is the time to consider entering the structured credit market.
2011 A Year of Low Volatility for the S&P 500
Generals have always formulated strategies and tactics. While these strategies may have been quite effective in the past, many have failed miserably in the present. Daily price swings may be higher than you like, but for an investor with a time frame greater than one day it shouldnt matter to you. You may be considering a risk reduction strategy in your portfolio based on the mistaken belief that markets are more volatile now than in the past. For a long-term investor this action will surely increase your cost and minimize the potential returns that the capital markets can provide you.
What IPOs and Buybacks are Telling Us Today About Tomorrow!
Supply and demand is the basis for technical analysis and for just about every other short-term trading method. The past years volatility of market prices is pretty good evidence on how quickly demand for shares can change. When the call of the day is risk on the market rises. When the call of the day is risk off, the market falls. The rapid change in price also tells us that in the short-term, the supply of shares is fixed. In the long term, the supply of shares will dominate market pricing. Unlike the demand for shares, which can change instantly, supply of shares changes slowly.
The French Influence of our Economy With A Little Common Sense to Boot!
My history lesson is in the form of letters from years past. The first is from Jean Baptiste Colbert, Frances controller-general of finance written in 1664 to King Louis XIV of France outlining his economic policies. King Louis assumed the throne in 1643 at the age of four but he did not assume personal control until 1661. At that time, feudalism still dominated the French economy. King Louis wanting greater wealth for himself and his country and to pacify the public, who were demanding change, embraced the actions of Colbert, making them the economic model for France.
December Monthly Economic Update
While the improving domestic economic picture seems to be pointing to continued slow growth, the markets are focused on Europe as they continue the tumultuous process of finding a resolution to their debt crisis. Until a long-term solution is found, we will likely continue to experience above average market volatility. In this environment we continue to favor a diversified mix of asset classes with an emphasis on yield.
Seeking income from AAA rated Corporations
Earning interest from bonds may seem to be the safe approach to seeking income. But consider this: If you took the same $1,280,683.03 invested in the 5 year Treasury note and instead invested $320,200 (plus or minus a few dollars in each of our AAA rated companies), your dividends would be $38,878. Is the possibility of a dividend cut in the next five years so great that the excess cash from the dividends will not equal the amount of interest earned on the Treasury? As an owner of all four of these companies I believe the potential reward is worth the risk.
Three Great Paragraphs from Peter Lynch
Since the stock market is in some way related to the general economy, one way that people try to outguess the market is to predict inflation and recessions, booms and busts, and the direction of interest rates. True, there is a wonderful correlation between interest rates and the stock market, but who can foretell interest rates with any bankable regularity? There are 60,000 economists in the U.S., many of them employed full-time trying to forecast recessions and interest rates, and if they could do it successfully twice in a row, theyd all be millionaires by now.
Consumer Confidence and Forward Returns of the S&P 500
The time of maximum pessimism is the best time to buy, and the time of maximum optimism is the best time to sell, as the most important, yet the most difficult to follow, as it is almost impossible to accurately judge the state of pessimism. However, measuring the current state of pessimism has been made much easier due to The Conference Board, a global independent business membership and research association. The Conference Board releases the Consumer Confidence Index each month, which is based on a probability-design random sample survey conducted by Nielsen.
SAP AG - A European Software Giant Worth Owning
If you want to achieve above average market returns then you cant just invest in an index fund. For those willing to venture out of those index funds there are three principles you should keep in mind: You will have to accept less diversification than the market; You must recognize that short-term speculative trading normally ends with your money in someone elses pocket; You must be willing to take a contrarian stance against the majority of investors. So what would be considered a contrarian play in todays market? Based on the flow of funds out of common stocks, it is common stocks!
Thinking Long-Term
We will never be able to remove all the news that influences our investment decisions, nor should we. What we can do is recognize that rapid trading and market timing may work in the short-term, but has reduced individual returns over the long-term. We can recognize that markets regress to the mean over long periods of time, but that may be much longer than you have or want. Our approach is an attempt to reconcile the two. We are fully aware that at times, stock and bond prices exceed value and at other times they are well below value.
S&P 500 to gain 10.48% by year end: Reuters Poll
According to the poll the S&P 500 index is expected to rise slightly from current levels to 1,250 by year-end, they further state that these expectations are a huge 150-point downgrade from the 1,400 consensus three months ago. We wont question the validity of their poll, results, nor the downgrade in consensus. What we want you to do is look at the results for what they are: a positive for intelligent investors. I hope after a period of thought, intelligent investors will choose as I haveto invest any savings for the long-term by purchasing common stocks of large quality companies.
Results 51–100
of 163 found.
