It's always a good idea to pay attention to Jeremy Grantham. Jeremy Grantham's interesting words from a Barron's interview. What else are you seeing in terms of sentiment? There is a high level of enthusiasm from the financial professionals, hedge funds in particular. This time you have a very high level of confidence from the professionals—but not a very high level of confidence from the individual investors. The individuals are a bit more down to earth. They felt the pain of 2009 longer than the institutions did, and they have been slow to come back into stocks when you look at net … [Read more...]
Archives for March 2014
The Rich Man
Your approach to this market needs to be like that of my favored prognosticator: the rich man. You see the rich man, as Dow theory legend Richard Russell says, doesn't need the markets. RULE 3: RICH MAN, POOR MAN: In the investment world the wealthy investor has one major advantage over the little guy, the stock market amateur and the neophyte trader. The advantage that the wealthy investor enjoys is that HE DOESN'T NEED THE MARKETS. I can't begin to tell you what a difference that makes, both in one's mental attitude and in the way one actually handles one's money. The wealthy investor … [Read more...]
SHOCK: Wave of Bankruptcies Set to Hit China
In a shocking admission Chinese Premier Li Keqiang warned lenders in the country to prepare for a wave of defaults on debt in the coming year. China had so far been able to prevent embarrassing defaults among its corporations, even by presumably bailing out the world’s largest bank earlier this year (no one knows exactly what happened here but common sense would point to a hidden government bailout). But the government couldn’t, or wouldn’t, act fast enough to save Shanghai Chaori Solar Energy last week. It’s a signal from the Communist Party that Beijing is getting out of the bailout … [Read more...]
Federal Reserve on the Right Track
The Federal Reserve's taper is the right move for the economy and eventually the markets. It moves capital away from the well-connected and towards those who need it most, small businesses. The big dogs on Wall Street, the well-connected, don't like it. What a surprise as David Malpass writes in his WSJ editorial: The evolution in Fed policy may be enough to finally break the economy out of slow growth. The magnitudes are certainly large enough to move the needle. On the current tapering path, the Fed will cut its new bank borrowing in half to $500 billion in 2014 and $0 in 2015. The … [Read more...]
China’s Deception
According to official statistics, China’s economy has grown at an average rate of about 7.5% in recent years. But PhD Copper says something has gone awry with the Middle Kingdom’s command style economic model. China is the world’s largest consumer of copper. If Copper prices are plummeting, the odds are China has something to do with it. The red flag that copper prices are sending on the Chinese economy is also being confirmed by the weakness in the Shanghai Composite Index. The performance of Chinese stock prices don’t seem to correlate with robust economic growth. … [Read more...]
Investing to Win the War
In my close to 20 years working with investors I have found gauging one's risk tolerance is more art than science. There are models galore that will give you an "appropriate" allocation for your age, income needs etc. But often times that's thrown out the window when times get tough. And tough they have gotten, for example, in the 2000 tech bust and the recent crisis in 2008. It's amazing to me how quickly the rough times have been forgotten. In the good times, most investors feel they're thick skinned and can handle the volatility in the market. That is until they start losing some serious … [Read more...]
VIDEO: Investment Advisor Bait and Switch, GET YOUR MONEY BACK!
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Thanks for the Investment and Good Luck!
Some of the big dogs in private equity are selling. Good luck to those who stick around. The WSJ reports: Shares of private-equity firms are soaring, and buyout barons are selling. Top executives at three publicly traded private-equity firms have sold more than $500 million of their firms' stock over the past year, according to securities filings. The most recent sellers are Carlyle Group LP co-founders co-Chief Executive William Conway and Chairman Daniel D'Aniello, who have sold between $39.6 million and $48.9 million of stock apiece, according to a securities filing Thursday. The … [Read more...]
India: Bringing Home the Gold
If you were watching the Sochi Olympics opening ceremony you saw a curious sight. The team from India was forced by the International Olympic Committee (IOC) to enter into the stadium without their flag. Instead they carried the Olympic flag and entered as “independent athletes.” The brouhaha started when the Indian Olympic Association’s (IOA) election process was allegedly manipulated by the government, putting an accused fraudster among the association’s leadership. With that, the IOC banned the Indian athletes from competing from India. Eventually the IOA held new elections and by the end … [Read more...]
Who’s Watching Your Money?
There are a lot of charlatans out there that have been trusted with the management of other people's money. It's shocking how many get away with it. According to this WSJ analysis there are many red flags that go unnoticed by clients: In less than two years, stockbroker Marcos D. Leiva racked up a personal bankruptcy, a tax lien, a court judgment for unpaid debt and a criminal guilty plea relating to a false report to law enforcement. Each should have been promptly disclosed to investors. None was. Mr. Leiva is one of more than 1,600 stockbrokers whose records failed to disclose … [Read more...]