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The Most Important Practice Management Challenge
by Bob Veres,
The future of the advisory business is all about people, according to Philip Palaveev. No matter what happens with consolidation and pricing, he says, no matter what role technology plays, the most successful firms of the future will be those which excel at retaining, motivating and organizing their people.
Buffett's Advice for Apple Inc.
During a recent interview on February, 27th on CNBC Warren Buffett described a phone call he got from the late Apple CEO Steve Jobs. Mr. Buffett gave this account, "It was an interesting conversation because I hadnt talked to him in a long time. He said, Weve got all this cash. What should we do with it? So we went over the alternatives. It was kind of interesting." Mr. Buffett often comments in his annual letters about the options for deploying cash and he did again in this interview.
ECRI Recession Indicator: Unchanged from Last Week
The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) to one decimal place is unchanged from last week. It is now at 129.7, the same as last weeks downward revision from 129.8. The WLI annualized growth indicator (WLIg) has risen fractionally to 6.6%, up from last weeks 6.3%. Those of us who regularly follow ECRIs publicly available data and commentaries understand that there is no logical connection between ECRIs proprietary indicators and their "pronounced, pervasive and persistent" recession call of September 2011.
On the Fed, the Keystone Pipeline & the War On Jobs
The Fed Open Market Committee (FOMC) met as scheduled last Tuesday and Wednesday to review monetary policy and its massive quantitative easing effort. The official policy statement released at the end of the meeting on Wednesday was little changed from those in previous months.
Throw the Book at Him
On February 2, Ground Hog Day, Punxsutawney Phil failed to see his shadow forecasting, and as legend has it an early spring. Yet on the first day of spring, I looked out my back window at a lake still more than half frozen with my view partially obscured by a wicked little snow flurry. So much for forecasts!
North Korea's Problem
In December, North Korea launched a satellite into orbit, which was a violation of U.N. resolutions against ballistic missile tests. Last month, it carried out its third nuclear test, which was apparently more successful than the previous two attempts. The U.N., with Chinese approval, approved additional sanctions on the regime.
A Cry for Help from Income Investors
Confronted with the stark realities of income investing now, affluent investors all over the world are rethinking their approach, notes Legg Masons just-released Global Income Survey. Yet the Survey also found income investors hungry for more knowledge and ideas -- creating opportunities for savvy financial advisors.
In Gold We Trust
Poorly thought out government policies hurt the formation of capital and destroy people?s trust in paper money. Leaders may have good intentions, but some of their actions show disrespect for private property and individualism. This only reemphasizes gold as an important asset class.
ECRIs "Recession" Indicators: Unchanged from Last Week
The only new ECRI-related news since last Fridays update is a CBS Moneywatch commentary, Can the stock market rise while the economy stalls? ECRI liked the commentary well enough to reprint it on the companys website. It basically reiterates Achuthans point in the "Yo-Yo Years" essay that its possible for the market to rise during a recession, citing three such instances (of the 15 recessions) since the Roaring Twenties.
Insights on India: Land of Paradoxes
Technology has made it easy for our emerging markets team to stay in contact from nearly every corner of the globe, but electronic communications cant replace human interaction through a face-to-face exchange of ideas. Twice a year, our 50+ analysts gather together in a single location to share opinions on companies, discuss global events, and conduct a peer review and evaluation. Ive invited my colleague, Chetan Sehgal, to pen his thoughts on India and why we chose it as the location for our most recent gathering.
Will the Real Unemployed Please Raise Your Hands?
This weeks letter will be a very short part of a book I am writing with Bill Dunkelberg (the Chief Economist of the National Federation of Independent Businesses) on the future of employment. It has taken longer to write than I initially anticipated, for a host of reasons, chief among which is that the future is not as obvious as I originally thought. Diving into the data has brought a few surprises.
Investors Need to Pivot
by William Benz of PIMCO,
Fixed income investors need to think differently in the current environment. Investors may want to consider pivoting to strategies that are less focused on traditional benchmarks and more oriented to generating income and providing greater flexibility to hedge against rising rates, widening credit spreads or higher inflation.
Gamblers Fallacy
by Jeffrey Saut of Raymond James,
My luck has gotta change is a famous lament that has buried many a player on the crap tables. But as shown in the aforementioned coin toss quote, The outcomes in different tosses are statistically independent and the probability of any outcome is still 50%. While thats true in gambling, it is not so true in the stock market. The fact is, there are certain historic precedents in the stock market that can tilt the odds of success decidedly in your favor.
Five Steps to Demonstrate Your Value Today
by Dan Richards,
Of the broad trends facing the financial service industry, the most powerful will be greater transparency. It will force everyone ? and advisors in particular ? to clearly demonstrate the value they provide. How advisors respond to this shift to a value-driven world will determine whether they succeed or fail.
Global Economic Overview
by Team of Thomas White International,
Global economic trends largely remained positive during February, though the stalemate after the Italian elections and the failure by policymakers to reach a deal to avoid the U.S. sequester heightened the political and policy risks. The U.S. GDP figure for the last quarter of 2012 was revised higher, showing the worlds largest economy managed to avoid a decline.
ECRIs Recession Call: Proprietary Indicators Still Not Cooperating
The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) rose in todays update. It is now at 129.9 versus the previous weeks 129.5 (revised upward from 129.3). The WLI annualized growth indicator (WLIg) has eased, now at 6.3, down from last weeks 6.4 (an upward revision from 6.2).
Feared Copper "Flood" More Likely a Trickle
by Jon Ruff of AllianceBernstein,
Investors have turned bearish on commodities, particularly in the case of copper, where recent talk of a looming surge in new supply has sparked fears of a price rout. Were skeptical about the copper supply-glut story and dont think whats happening in copper is a "canary in the coal mine" for the rest of the metals markets.
Weekly Market Commentary
Although ecstasy reigned supreme last Tuesday as the Dow crossed into record territory, not everyone felt as if they shared in the bounty. It's at times like these that we must be mindful of the distinction between economic recovery and market recovery. Two phenomena which fly in tandem, on parallel tracks, are not always inextricably linked, and in this case the parallel disconnect is wide and obvious.
The Plow Horse is Trotting
In October 2012, we raised our recession odds from 10% to 25%. We saw an increase in uncertainty and fear over the election and the fiscal cliff as having the potential to cause a drop in velocity. Panics (falling velocity) are rare. As a result, our base case (75% odds) was for a 2.5% to 3% increase in real GDP for 2013. Real GDP increased just 0.1% in Q4, but now it appears the Plow Horse is starting to trot a little.
America?s Criminal Crony Capitalism
by Michael Edesess,
Charles Ferguson believes that every prosecutorial tool at our disposal should be used to indict, fine severely, and imprison those whose transgressions contributed to the recent financial crisis ? not just their companies, but the executives as individuals.
Two Myths and a Legend
by John Hussman of Hussman Funds,
The present market euphoria appears to be driven by two myths and a legend. Make no mistake. When investors cannot possibly think of any reason why stocks could decline, and are convinced that universally recognized factors are sufficient to drive prices perpetually higher, euphoria is the proper term.
Ride Over Bump in Gas Prices with These Investment Themes
U.S. oil independence is picking up steam. In December, the country lost its position as the world's largest importer of oil, with shale production climbing faster than expected. Net imports fell below 6 million barrels per day, domestic production increased more than 1 million barrels per day and demand declined by about 700,000 barrels per day.
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.
How to Keep Calm and Invest On
The market noise of today will not be going away. However, investors can gain confidence in the following wisdom of the crowd. As famous investor Benjamin Graham said, "The individual investor should act consistently as an investor and not as a speculator. Keep calm and invest on.
Breaking Free from the Safe Withdrawal Rate Paradigm: Extending the Efficient Frontier for Retiremen
by Wade Pfau,
The traditional safe withdrawal rate approach that relies on a portfolio of only stocks and bonds produces among the worst possible outcomes for meeting spending needs and preserving financial assets for other uses. My research demonstrates there is a better approach.
Greetings from Istanbul!
As I travel around Turkey, I am reminded how vital good government policies are to the health of a nation. Following a decade of fiscally responsible actions, Turkey is the picture of a growing prosperity. Perhaps Americas elected officials could take a tip from this vibrant country overseas.
The Fed's Tightening Pipe Dream
Testifying before the US Senate this past Tuesday, Fed Chairman Ben Bernanke made an extraordinary claim about its bloated balance sheet: "We could exit without ever selling by letting it run off." What Bernanke means here is that the Fed could simply hold its Treasuries and agency bonds until they mature, at which point the government would then be forced to pay the Fed back the principal amount. Through this process, the Fed's unprecedented and inflationary position will be gradually and placidly unwound.
Pew: Americans Have Little Will to Cut Spending
The Pew Research Center released a new national poll on Friday and the results are quite surprising. As the March 1 deadline for a possible budget sequester approaches, the new Pew survey finds limited public support for reducing spending for a wide range of government programs, including defense, entitlements, education and health care.
Uncovering 'Diamonds in the Rough' in Today's Credit Markets
by Mark Kiesel of PIMCO,
There are still good opportunities for yield and total return in the credit markets, but there has been a shift in where and how investors can find them. A "diamond in the rough" is a credit that is under-covered, or not actively followed or researched by many investors. At PIMCO, we identify these opportunities through our top-down and bottom-up investment process. We've identified a number of sectors that appear poised for above-average growth.
Frontier Markets: Today's Models of Fiscal Prudence
by Paul Herber of Forward Management,
Say you are evaluating the markets of two countries in a search for investment growth opportunities. One country's sovereign debt is 120% of its gross domestic product (GDP), while the other has outstanding sovereign debt that represents only 11% of its GDP. Saddled with sovereign debt, the first country faces painful fiscal austerity measures, inflationary ones, or bothany of which will no doubt stifle economic growth.
Is it Time to Review Your European Investment Strategy?
by Team of Thomas White International,
A sharp equity and bond market reaction is likely expected in response to the outcome of Italy's February 24-25 general elections, several media sources such as THE GLOBE AND MAIL have reported. While the poll result is uncertain, these reports indicate that in the event of a clear victory for Silvio Berlusconi's political party, buying interest in equities and lower-quality debt may be affected.
A Test of Strength for Gold
This week, we saw the gold bears growling louder and gaining strength, as the worlds largest gold-backed ETF, the SPDR Gold Trust, experienced its largest one-day outflows since August 2011. The Fear Trade fled the sector following the Federal Reserves meeting that revealed a growing dissension among some of its members over the central banks bond-buying program.
Finding What's Real in Real Estate
The U.S. financial crisis in 2008-2009 left many investors with a reluctance to take investment risks, particularly those related to any of the world's wilted housing markets. However, as your local real estate agent would likely tell you, the market in one location can be vastly different than it is in another. Wilson Magee, co-manager of Franklin Global Real Estate Fund would agree that the adage "location, location, location" applies not only to individual home buyers and sellers, but to investors seeking opportunities in the commercial real estate sector, too.
When It Comes to Gold, Stick to the Facts
During short-term gold corrections, its much more important to focus on the facts, including the fact that gold is increasingly viewed as a currency. Rather than buying real estate, lumber or diamonds, central banks around the world are buying gold. According to the World Gold Council (WGC), over 2012, central bank demand totaled 534 tons, a level we have not seen in nearly 50 years.
Is Love in the Air?
This week includes Valentine's Day, the day millions worldwide exchange cards, letters, candy, flowers and other gifts with the center of their affection. Surely there must be a study of Valentine's Day. But search as I might, I could not find a single study of the influence of this fabled day on our financial markets. I did find one in Australia that dared to show that the chances for an up or down day in their stock market were, what else, 50-50. Could it truly be that we had finally found a seasonal event that was dare I say it random?
Currency Wars? What Currency Wars?
There's much talk of currency wars right now. We think they're way overblown. The source of the problem lies with Japan, which has made explicit a strategy to lower the yen, increase domestic demand and increase inflation. It needs to do all three. The twenty year old balance sheet recession and deflation in Japan has been a costly error in targeting inflation and not much else.
We Have Met the Enemy, and He Is Us
If modern portfolio management has a single defining urge, it is almost certainly diversification. We look for diversifying assets, strategies, and managers. A thoughtful investor can argue against almost any asset class stocks, bonds, hedge funds, private equity, commodities, you name it but arguing against diversification is like arguing against indoor plumbing. I dont want to sound like I'm calling for a return to chamber pots and outhouses, so I'm not actually going to argue against diversification.
Investing in a Low-Growth World
by Jeremy Grantham of GMO,
This quarter I will review any new data that has come out on the topic of likely lower GDP growth. Then I will consider any investment implications that might come with lower GDP growth: counter intuitively, we find that investment returns are likely to be more or less unchanged a little lower only if lower growth brings with it less instability, hence less risk. Finally I will take a look at the reaction to last quarter's letter, specifically about my outlook for lower GDP growth.
Focus on Fixed Income
Last week Administration officials, including the President, clearly ruled out using extraordinary legal measures to avoid defaulting on Treasurys financial obligations in the absence of a debt ceiling hike by Congress. The two legal measures most discussed, going back to the summer 2011, were invoking the 14th Amendment and minting a trillion dollar platinum coin. The coin idea was dismissed as Fed officials commented that the central bank would not honor the coin as a deposit, and the amendment idea has been shelved a number of times.
GDP Report Tanks - Is A Recession Looming?
We will cover a lot of ground today. We begin with a new report from Goldman Sachs which argues that the US economy will remain the strongest in the world for many more years. The report rebuts claims that America is a nation in decline. Quite the contrary, say Goldman analysts who claim that there is a growing"awarenessof the key economic, institutional, human capital and geopolitical advantages the U.S. enjoys over other economies."
2012 Equity Market Market Year in Review
Equities started the year strong as global inflation remained tame, and aggressive, accommodative monetary policy by central banks around the globe helped equity markets rally hard off their lows posted in the fall of 2011. Continuously improving U.S. economic data, strong corporate earnings, and policy steps toward mitigation of the sovereign debt crisis in Europe also provided support for the equity markets worldwide.
Results 4,051–4,100
of 4,353 found.
