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Understanding Chinese Volatility
by Andy Rothman of Matthews Asia,
Sinology by Andy Rothman is a publication designed to provide investors with a framework for developing a deeper understanding of China and its economy. The focus will be on discussing the longer-term trends that are taking place in the country and their impact on the global economy. Rising volatility in China is a consequence of economic modernization and should not be feared by long-term investors.
Summer Essays
by Jeremy Grantham of GMO,
In a new quarterly letter to GMO's institutional clients, co-head of asset allocation Ben Inker uses the evolving Boston culinary landscape as a backdrop to examine the tendency of investors to pursue a "free lunch," when they should be looking for the "investing equivalent of an inexpensive and tasty food truck meal instead." In his section, chief investment strategist Jeremy Grantham looks back at investing mistakes made over his 47-year career, paying special attention to his formative investing years and the "painful lessons" learned therein.
2Q 2014 Newsletter: Avoiding Your Portfolios Enemies
Investors should remember that excitement and expenses are their enemies. And if they insist on trying to time their participation in equities, they should try to be fearful when others are greedy and greedy when others are fearful. We often hear the last part of this wonderful quote from Warren Buffett, but here at Smead Capital, we find the beginning just as instructive. We thought we would unpack the entirety of his thoughts and dissect it for our faithful investors.
Are Prices Too High in U.S. Commercial Real Estate??
by John Murray of PIMCO,
The recovery in commercial real estate (CRE) has been driven more by low rates than improvements in fundamentals. However, fundamentals are improving and capitalization rates should remain low amid low New Neutral policy rates. We expect capital flows in both debt and equity to CRE to continue to increase, and we see opportunities for investors resulting from capital flows, demographics, loan maturities and regulatory reforms. ?
The Tide is High
It took a while but I think I finally get it. The Federal Reserve has embarked on a Parallel Campaign - operating on two separate planes that seemingly never intersect, yet both having readily recognized similarities. My eureka moment finally came this past week when Ms. Yellen, in a rebuff to the Bank for International Settlements, said "because resilient financial system can (now) withstand unexpected developments, identification of bubbles is less critical."
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.
I'm Grateful to Live in America. Here's Why.
An important principle of our investment process at U.S. Global Investors is a belief that government policies are a precursor to change. As a result, we closely monitor the fiscal, monetary and other impactful governmental policies of the worlds largest countries, both in terms of economic stature and population. Were always listening for the proverbial shot heard around the world. As we approach Americas Independence Day, this belief rings especially true.
Central Bank Smackdown
by John Mauldin of Mauldin Economics,
And so it is that on a beautiful July 4 weekend we will amuse ourselves by contemplating the serious smackdown that central bankers are visiting upon each other. If the ramifications of their antics were not so serious, they would actually be quite amusing. This weeks shorter than usual letter will explore the implications of the contretemps among the worlds central bankers and take a little dive into yesterdays generally positive employment report.
New Research on How to Choose Portfolio Return Assumptions
by Wade Pfau,
Care must be taken with portfolio return assumptions, as small differences compound into dramatically different financial outcomes over a lifetime. My research shows just how big those differences are and how they vary in the pre- and post-retirement phases.
The New Normal of Healthcare Spending
by John Mauldin of Mauldin Economics,
A rather interesting shockwave came across the newsfeeds this week. I was actually doing a TV interview when the host announced that GDP was down 2.9% for the first quarter. There was not much else I could do but note that that was a really bad, ugly, terrible, not very good number.
Health Care Sector Spurred by Population Growth and M&As
Recently I spoke with John Derrick, director of research here at U.S. Global, to pick his brain about what he thought was the most interesting sector right now. You might expect him to have said energy, perhaps because of the intensifying violence in Kurdistan Iraq, a major oil producer. But instead, he said that he had his eyes on health care.
F.A.S.T. Fundamentals On CSX Corp
by Team of F.A.S.T. Graphs,
CSX has performed exceptionally well over the past decade. The usual suspect metrics like P/E ratios, dividend yield and expected earnings growth indicate that the company might be a reasonable investment. This article takes a behind the scenes view of a variety of additional fundamental data.
A Contrarians View of Value: Pharmaceuticals
by Kevin Holt of Invesco Blog,
The pharmaceuticals industry is in the midst of a renaissance. Patent expiration concerns, pipeline disappointments and setbacks, and a highly uncertain regulatory backdrop have forced managements to rethink the way they have historically conducted business. In this environment, certain companies stand out to us as deep value opportunities businesses whose stock prices dont reflect our view of their long-term potential.
Euro-Sterling Credit: Yield and Spread Still Appeal
by Ketish Pothalingam of PIMCO,
Framed by ongoing renormalisation in Europe and stronger UK growth, euro-sterling investment grade credit markets are in a favourable part of their respective cycles as corporates continue to deleverage, default rates are expected to remain low ahead and market liquidity has improved across Europe. We believe the sterling credit market provides a more balanced credit market and offers investors the opportunity for better total carry versus euro and global investment grade credit markets.
Retirement Income Strategies: How to Improve on the 4% Rule
by Joe Tomlinson,
In the past few years, the 4% rule has been challenged by those who claim its premise of 4% inflation-adjusted withdrawals is too optimistic under today's market conditions. Others assert that more sophisticated approaches will yield better-than-4% results. I'll evaluate two alternatives - economic utility maximization and required minimum distributions - and also discuss the practical implications for advisors.
Looking at the Middle Kingdom with Fresh Eyes
by John Mauldin of Mauldin Economics,
China has the potential to become a real problem. It seemed to me that almost everyone who addressed the topic was either seriously alarmed at the extent of Chinas troubles or merely very worried. Perhaps it was the particular group of speakers we had, but no one was sanguine. If you recall, a few weeks back I introduced my young colleague and protg Worth Wray to you; and his inaugural Thoughts from the Frontline focused on China, a topic on which he is well-versed, having lived and studied there. Our conversations often center on China and emerging markets (and we tend
Piketty's Envy Problem
by Peter Schiff of Euro Pacific Capital,
There can be little doubt that Thomas Piketty's new book Capital in the 21st Century has struck a nerve globally. In fact, the Piketty phenomenon (the economic equivalent to Beatlemania) has in some ways become a bigger story than the ideas themselves.
In a Flash, China Looks Strong
If you want to know where the world economy is headed, there is one number that I believe investors should focus on: the HSBC China Manufacturing Purchasing Managers Index (PMI). On Thursday, the preliminary flash PMI for May came in at 49.7, beating Bloombergs consensus of 48.3.
Mixed Signals and the Road Less Traveled
As the markets flirt with all-time highs and a potential shift in Fed policy, earnings season has not altered the fact that the level of investor uncertainty feels elevated. Throw in the case of a really bad winter, a geopolitical environment that rhymes with events just prior to World War I, and poor trading volumes, and it all suggests that heightened levels of unease remain.
Schroders Monthly Markets Review: Overview of Markets in April 2014
Global equities edged higher in April. Some stronger macroeconomic data from developed economies helped to support returns but the ongoing crisis in Ukraine remained a headwind for equities. Developed markets outperformed emerging markets. In the US, a generally firmer tone to macroeconomic data and a broadly encouraging corporate earnings season supported sentiment. Investors were also reassured by comments from Federal Reserve (Fed) Chair Janet Yellen about maintaining low interest rates.
Gold and Portfolio Efficiency
by Ade Odunsi of AdvisorShares,
In previous commentaries we have discussed the benefits of using a diversified financing currency approach for investing in gold by which we mean using two or more currencies (rather than just the US dollar) to make gold purchases. The example we have used to demonstrate the approach was to construct a time series of the price of gold purchased with an equal weighted basket of dollars, euro, yen and pound.
First Quarter Letter
by Team of Grey Owl Capital Management,
The broad equity market displayed a fair amount of volatility during the quarter, but essentially went sideways. This pattern continued through April; 2013s losers became 2014s winners and vice versa. In the broadest sense, bonds narrowly beat stocks on the heels of 2013s thorough drubbing.
And the Band Played On
by Peter Schiff of Euro Pacific Capital,
After three months of consistently disappointing jobs numbers, the markets were as keyed up for a good jobs report as a long suffering sailor awaiting shore leave in a tropical port. The just released April jobs report, which claimed that 288,000 jobs were created in the U.S. during the month, provided the apparent good news. But you don't have to go too far beneath the surface to find some troubling trends within the data. Even this minor excavation was too much for the media cheerleaders and Wall Street pitchmen to handle.
Albania?s Fertile Grounds for Oil Opportunities
Texas is oil country. The state I now call home leads the nation in oil production and would be one of the top oil-producing nations if it were its own country. But that doesn?t stop us from exploring other promising oil opportunities further afield. I recently traveled to Albania to check out a drill site of Petromanas Energy, a Calgary-based international oil and gas company focused on exploration and production throughout Europe and Australia. We own the junior stock in our Global Resources Fund (PSPFX) and Emerging Europe Fund (EUROX).
Albania's Fertile Grounds for Oil Opportunities
Texas is oil country. The state I now call home leads the nation in oil production and would be one of the top oil-producing nations if it were its own country. But that doesn?t stop us from exploring other promising oil opportunities further afield. Last week I traveled to Albania to check out a drill site of Petromanas Energy, a Calgary-based international oil and gas company focused on exploration and production throughout Europe and Australia. We own the junior stock in our Global Resources Fund (PSPFX) and Emerging Europe Fund (EUROX).
A Yen for a Mortgage
by John Mauldin of Mauldin Economics,
For some time I have been saying that I was going to close the mortgage on my new apartment and then hedge it in yen. I promised to tell you the story, including what type of loan I got and how I am doing the hedge. This week I was finally able to pull the trigger. This topic will also let us re-examine why I think the Japanese yen is a screaming short. This is not a big think piece, but I think many of you will find it interesting. It outlines how I put my economic thinking into actual practice, and names names, if you will, of those who helped me do it.
The Real Obamacare Nightmare is Just Beginning
Last Thursday, the Obama administration said that a total of eight million Americans had signed up for Obamacare. In a hastily called press event, President Obama spiked the football, took a victory lap around the White House and declared the healthcare law a smashing success ? although they still haven?t told us how many enrollees have actually paid a premium, or how many were simply replacing their policies that were canceled due to Obamacare.
U.S. Financials: Investment Theme Update
by James Calhoun of AdvisorShares,
We reaffirm our recommendation for U.S. Banking and Financial Services as a satellite equity investment. The Federal Reserves "Stress Test" reinforces a constructive outlook and conservative risk profile for U.S. Banks. The positive results confirm that U.S. banks have enhanced their ability to withstand macroeconomic challenges by reducing problem assets during the past few years. Equally important, the financial sector appears to be more exposed to a key driver of the broader equity market advance over the last few years: share buyback programs and increasing dividends.
Master Limited Partnerships
Master Limited Partnerships (?MLPs?) are a unique asset class in the investment landscape. Historically, MLPs have been primarily owned by high net worth and retail investors due in part to the tax complexities. However, MLPs have started gaining traction over the past few years among institutional investors as they seek alternative sources of yield in our present low-yield world.
Dare to be Great II
In September 2006, I wrote a memo entitled Dare to Be Great, with suggestions on how institutional investors might approach the goal of achieving superior investment results. Ive had some additional thoughts on the matter since then, meaning its time to return to it. Since fewer people were reading my memos in those days, Im going to start off repeating a bit of its content and go on from there.
Moving Forward With the Normalization of Yields
by Scott Mather, Michael Story of PIMCO,
One response to yield normalization is to consider retaining core bonds and diversifying the specific risk factor of concern, in this case duration. In the past, global bonds have captured most of the upside but avoided a significant amount of the downside relative to domestic-only bonds. Generating capital gains from bonds in a rising yield environment requires defining concretely what yield normalization means ? where yields are going and when they will get there ? and setting these expectations against forward market pricing, country by country.
The Stealth Rally: Gold Under the Radar
So far, 2014 has been a paradoxical year for gold. Many investors aren't even aware that it has rallied almost 8%. On the rare occasion that the financial media mentions the yellow metal, it is only in the context of comparing the recent rise to last year's decline.
ProVise Bullets
by Team of ProVise Management Group,
During the Great Recession, America laid off two million factory workers and factory output fell 20 percent. Before the Great Recession, of course, manufacturing jobs were headed overseas. As we have slowly emerged from the Great Recession, its a little surprising to some that manufacturing has led the way, outpacing overall GDP growth. This year it looks like manufacturing could add 3.5 percent in growth. Is this just a replacement of jobs that were lost during the Great Recession?
Fed-Induced Speculation Does Not Create Wealth
by John Hussman of Hussman Funds,
Fed-induced speculation does not create wealth. It only changes the profile of returns over time. It redistributes wealth away from investors who are enticed to buy at rich valuations and hold the bag, and redistributes wealth toward the handful of investors both fortunate and wise enough to sell at rich valuations and wait for better opportunities.
Debt and Taxes
by Peter Schiff of Euro Pacific Capital,
It seems that the majority opinion on Wall Street and Washington is that we have entered an era of good fortune made possible by the benevolent hand of the Federal Reserve. Ben Bernanke and now Janet Yellen have apparently removed all the economic rough edges that would normally draw blood. As a result of this monetary "baby-proofing," a strong economy is no longer considered necessary for rising stock and real estate prices.
Debt and Taxes
by Peter Schiff of Euro Pacific Capital,
The red flags contained in the national and global headlines that have come out thus far in 2014 should have spooked investors and economic forecasters. Instead the markets have barely noticed. It seems that the majority opinion on Wall Street and Washington is that we have entered an era of good fortune made possible by the benevolent hand of the Federal Reserve. Ben Bernanke and now Janet Yellen have apparently removed all the economic rough edges that would normally draw blood.
Japan?s Rising Opportunity
After WWII, the Japanese economy began what is sometimes referred to as the ?Economic Miracle?, a three-decade long period of growth and prosperity. Japanese firms and their management teams were studied around the world as the model of efficiency and an example for all companies and leaders to strive for. In 1989, a bubble in real estate fueled by speculators burst, and the Japanese markets crashed. Since then, the Japanese economy has been in a virtual standstill with more than two decades of stagnant growth and a deflationary environment.
Currency Markets Heat Back Up, and Will Likely Remain that Way
by Chris Maxey, Ryan Davis of Fortigent,
Long dormant after the financial crisis, foreign exchange markets are beginning to heat up, offering ample trading opportunity for asset managers. The U.S. dollar was widely viewed as being the best long trading opportunity for 2014, but so far, that has not played out, with activity in the Euro, Chinese Yuan, and other currencies impeding dollar strength.
Assessing the Impact of Financing Currency on Gold Price Performance
by Ade Odunsi of AdvisorShares,
In our weekly commentary we follow up our discussion from last week with a brief overview of the impact on performance of diversifying the financing currencies used to make gold purchases. We also compare "Gold/Basket" performance versus gold financed with a number of different, single currencies. For the purposes of this analysis we define the Gold Basket as a gold financed with an equally weighted basket of four currencies, the dollar, euro, yen and pound; the portfolio is also assumed to be rebalanced weekly.
ECB Officials' Inflation Forecasts
by GaveKal Capital,
The ECB announced that interest rates would be maintained at current levels earlier today, citing staff macroeconomic projections for the euro area, which foresee annual HICP inflation at 1.0% in 2014, 1.3% in 2015, and 1.5% in 2016. Though few economists predicted a rate cut, there were rumors that Europe's central bank might discontinue the sterlization of bond purchases under its Securities Markets Program (SMP)-- an action consistent with the adoption of a more accomodative and active policy.
Making Green from Gold, Palladium and Pollution
Gold is coming back with a vengeance, experiencing a clear recovery and grabbing the attention of market cynics. Analysts from Noruma Securities even upgraded its outlook for gold, expecting bullion to climb over the next three years, according to Barron's.
Results 2,201–2,250
of 2,772 found.
