We recalled these sage words from GMO’s (Grantham, Mayo & Van Otterloo) Jeremy Grantham as we watched the end of the quarter performance gaming and portfolio restructuring late last week. His comments are particularly cogent now that we have entered the month of October, since many money management firms close their fiscal year “books” at the end of this month.
“Managing risk,” what a novel concept, but regrettably many investors fail to do just that. My father taught me to manage risk, a trait emphasized in the sentinel book by Benjamin Graham, The Intelligent Investor, which Warren Buffett has deemed, “The best book ever written on investing” and where the aforementioned quote resides.
Reflecting on the months of travel as we wing our way back to Tampa at 38,000 feet, one of the more interesting encounters in those travels was spending time with Steve Forbes (Forbes Magazine). Although Steve is a staunch Republican, he suggested that Republicans worship at the altar of the CBO (Congressional Budget Office).
So, I am sitting here in downtown Saint Petersburg, Florida at 7:30 a.m. Sunday morning awaiting the “great flood.” It was just a few days ago the computer models had hurricane Irma heading up the east coast of Florida, but Irma changed her mind.
As many of you know, we have been on holiday in South Africa for the past three weeks. The trip began with a long plane ride to Cape Town where we were gathered up and taken to the five star rated Ellerman House (Ellerman).
I have written before how fantasy football is one of my favorite hobbies. For an analytical, data-obsessed sports fan like myself, it doesn’t really get any better than diving into statistics to try to draft a team of players that will beat my friends and win the trophy at the end of the season (and yes, we do have a real trophy).
The development of a personal trading or investing philosophy is usually an evolutionary and highly personal process. Through a combination of experience, trial-and-error, and the attainment of knowledge, successful market participants hone their skills until they find a strategy that works for them and that is consistent with their general mindset.
Right now, we don’t know if we can put this North Korea news in the same category of past market shocks, but looking back at history, major market collapses generally occur because of economic and financial deterioration, not geopolitics.
Ladies and gentlemen, investing is a lot like whaling. Investors are constantly searching for that whale of a stock with the “right stuff” . . . aka the “ambergris factor.” Indeed, there have been many such “whales” on the Street of Dreams since the Royal Bank of Scotland’s “sell everything” advice at the January/February of 2016 stock market lows.
One hour after beginning a new job which involved moving a pile of bricks from the top of a two story house to the ground, a construction worker in Peterborough, Ontario suffered an accident which hospitalized him. He was instructed by his employer to fill out an accident report.
Psychologists have uncovered a surprising number of idiosyncrasies from making the soundest choice in many situations. These lapses explain some of the mysterious up and downdrafts that can lift and lower stock prices. Understanding them can make successful investing easier. The most important findings arise from answers to a pair of questions.
I am not quite sure how I met Leon Tuey, but meet him I did a few years ago, much to my benefit. My guess it was through either a mutual friend or a Canadian reporter that we both speak to.
We first published this in 2014, but decided to republish it today given the cover story of Barron’s that reads “The Machine Driven Market,” which intuitively means the era of those machine driven models is nigh. I like this story.
“Active funds are now 71% overweight in the FANG companies after making the biggest move from value to growth since 2008.". . . Bank of America
Recently the word “they” has surfaced with the media; THEY are influencing elections, THEY colluded with the Russians, THEY are selling U.S. dollars, THEY are manipulating markets, THEY are buying bonds, and a week and a half ago THEY sold the tech stocks causing sort of a minicrash as whispers of a “bubble” careened down the canyons of Wall Street.
One of the good things about traveling is one gets the chance to read, think, and reflect on events that have taken place. To that point, while traveling last week I had the chance to read the transcript of ex-FBI director Comey’s testimony to the Senate intel committee.
Currently, we believe a trading high is due here with a subsequent 'hover' around the recent highs in the offing over the next few weeks. Following that, if correct, there should be another whole new leg to the upside.
On a craps table, if a 7 or 11 rolls on the first throw of the dice, you are an automatic winner if you are betting the “pass line.” But, if you roll a 2, 3, or 12 on the first roll, you lose.
Some inflation numbers were reported last week. They read: April PPI jumped 0.5% month/month, +2.5% year/year; +2.2% year/year was expected. Meanwhile, core PPI increased by 0.4% month/month, +1.9% year/year; +0.2% month/month and +1.6% year/year were expected.
So Andrew and I received a plethora of emails wanting to know what we meant about “A Seinfeld Market,” which was the title of Friday’s “Morning Tack.” As disclosed in that report, the concept was not ours, but rather Dr. Ed Yardeni’s as scribed in his insightful blog.
I had the pleasure of listening to Pippa Malmgren speak last week at the Raymond James Financial Services National Conference. Philippa "Pippa" Malmgren, according to Wikipedia, is “an American policy analyst.
Years ago we read a book that a Wall Street pro told us would give us good judgement by benefitting from the experiences of others who had suffered hard hits.
Back in 1983 I was enthralled with the movie “War Games.”
I spoke with uber investor Frederick “Shad” Rowe, captain of Dallas-based Greenbrier Partners, last Thursday. Shad always has great investment insights, and his March letter to investors was no exception.
I lived in and around the D.C. Beltway for years, and still have a good network on Capitol Hill. I have been thinking a lot about Ms. Duncan’s comments concerning people in D.C. easily being able to relate to fantasy given the current “fantasies” swirling around the “Beltway” since the presidential election.
“Pull” comes from an era long gone by when they actually had real birds in cages and the shooter would say “pull” to have the cage cord pulled and release the bird. The term “pull,” however, took on a whole new meaning last Friday when Speaker Ryan “pulled” the Republican healthcare bill (H.R. 1628) from consideration.
I spent last week climbing the mountains of Idaho and Utah, seeing accounts and doing presentations for our financial advisors and their clients. In my absence, the stock market did some climbing of its own...
I was a mere “pup” in this business when my father would tell me, “Son, if you think the market is going up be bullish. If you think it’s going down be bearish, but for gosh sakes make a call. And when you make a ‘call’ you are going to be wrong at times.
Around the turn of the century a bandit rode in from Mexico, robbed a small Texas bank, and fled back across the border. A Texas Ranger picked up his trail and nabbed him in a Mexican village. The bandit spoke no English and the ranger no Spanish, so another villager was asked to interpret.
Jesse Livermore was one of the legendary icons of Wall Street speculation. Known as the “boy plunger,” because he began trading at the tender age of 14, he was subsequently banned from many “bucket shops” for winning too often. Therefore, he moved to New York City to swing in the big leagues.
Something similar to this “new queen bee” story is happening now. The “old queen” has been the Federal Reserve and monetary policy. The “new queen” appears to be the White House and fiscal policy.
“Unseasonably mild and clearing,” was the weather forecast going into the Ides of March back in the year of 1888. And it was true, as temperatures hovered in the 40s and 50s along the East Coast. However, torrential rains began falling...
“You have enemies? Good. That means you've stood up for something, sometime in your life.” . . . Winston Churchill
As most of you know, I was in Europe for 19 days seeing institutional accounts and speaking at conferences. However, the last few days of the trip were spent with our new institutional affiliate Oscar Gruss & Son in Israel, where Avi Avital and Ronen Cohen met me at Ben Gurion Airport along with Bena Mantel.
We have often written that when everyone is asking the same question, it is usually the wrong question. However, I have also found the converse to be quite true – if no one is asking a question, it is probably one that you want to at least ask yourself just in case.
By now, you have likely heard something, either directly or indirectly, about “The Great Rotation” from bonds into stocks.
We live in a modern world of acronyms and buzzwords, and the financial industry is certainly no exception. In fact, it may be one of the worst culprits, what with FANG, ZIRP, TINA, BREXIT, QUITALY, BRIC, etc. all entering the lexicon over the last few years.
“It’s what you learn after you know it all that counts.” - Earl Weaver
As we enter 2017, we expect the current economic rebound to continue suggesting GDP growth will likely move toward the 3% level by the end of the year based on less monetary stimulus, more fiscal stimulus, a reduction in the corporate tax rate, and deregulation.
“Miracle on 34th Street” is a 1947 movie whose plot takes place between Thanksgiving Day and Christmas in New York City. It focuses on a department store Santa Claus who claims to be the real Santa.
The absolute price of a stock is unimportant. It is the direction of price movement which counts.
One of the funnier shows in the Seinfeld comedy series was “Serenity Now.” The show centered on that phrase (serenity now) as George’s father, Frank Costanza, repeats the phase numerous times every time he gets upset.
In honor of the Thanksgiving holiday this week, I thought I’d reshare the fabled Wall Street tale about a character named “old Turkey” from the 1923 classic Reminiscences of a Stock Operator.
So, last week was interesting, huh? If nothing else, it was definitely a far cry from two or three months ago when investors could check in on the markets only every few days and not really miss much of anything.
Many shrewd investors who were nervous about overvalued shares had lost out before by selling too early and were coming back into the market.
There was the king who held a chess tournament among the peasants and asked the winner what he wanted as his prize.
The analogy between the stock market and poker has always been irresistible. Interestingly, the stock market increasingly resembles a low-stakes recreational game among friends and less the sort of ‘there goes the ranch’ game favored by cutthroat professionals.
I knew that I had to adopt a cold, unemotional attitude towards stocks; that I must not fall in love with them when they rose and I must not get angry when they fell; that there are no such animals as good or bad stocks.
