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Investment Research Since 1978

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Archives for May 2016

Worthy Reads: China Loses Resolve to Revamp Yuan

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China Loses Resolve to Revamp Yuan (WSJ) Save the Planet by Drinking Beer, Wastewater Beer (Bloomberg) The Ideal Bet: Firms That Don’t Invest (WSJ) What’s next for the longest stock market correction in history? (MarketWatch) These Are The Most Widely Held Stocks By Hedge Funds (ZeroHedge) … [Read more...]

Joseph’s Garage Featured in Babson Magazine

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You will love this story about the Joseph brothers featured in Babson Magazine Spring 2016. They run a third-generation business in Norwell, MA started by their grandfather in 1928. It reminded me of a family run gas station in Newport that closed not too long ago. Just like Cheers everybody knew your name, your kids’ names, and always had a dog treat handy. Technology can’t replace everything. The Joseph brothers don’t bother having business meetings. Many times, they can come to a decision without even saying a word to each other. Art and John, both ’84, are the third-generation owners … [Read more...]

The Monday Melee: Student Loans Soar

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Graduates Face Tidal Wave of Debt As another crop of students graduates from colleges and universities across America, they face uneven job prospects and the reality of massive student loan debt. You can see below that student loan debt has reached $1.23 trillion dollars, and while delinquencies have come down somewhat from their peak in 2013, they're still very high historically 11.5% of loans more than 90 days late on payment. 40% of Borrowers Aren't Making Payment Survey Says....One in Five Students Not Responsible with Loan Money The website StudentLoanHero.com surveyed students … [Read more...]

Worthy Reads: U.S. Corporate Debt Stirs Concern

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Valeant Investor Sequoia Fund to Limit Stakes in a Single Stock (WSJ) Why there could be a Laffer curve — for the fed funds rate (MarketWatch) U.S. Corporate Debt Stirs Concern (WSJ) Oil Discoveries Have Shrunk to a Six-Decade Low (Bloomberg) America’s Card Debt Soars (WSJ) Fischer: (Money), Interest and Prices: Patinkin and Woodford (Federal Reserve) US Entitlements: In Government We Trust (Dr. Ed's Blog)   … [Read more...]

Existing Home Prices Red Hot

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The average prices paid in sales of existing homes is nearing it 2006 high (12 month moving average). Historically low Federal Reserve rates and unprecedented quantitative easing have nearly achieved creating a complete rebound in existing home prices. The 12 month moving average of the sales price measure is only 1% below its all-time high. … [Read more...]

The Prudent Man

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Originally posted September 29, 2015.  In the September 2015 issue of Richard C. Young's Intelligence Report, Dick Young wrote: The Prudent Man Rule is based on common law stemming from the 1830 Massachusetts court formulation Harvard College v. Amory. The Prudent Man Rule directs trustees "to observe how men of prudence, discretion and intelligence manage their own affairs, not in regard to speculation, but in regard to the permanent disposition of their funds, considering the probable income, as well as the probable safety of the capital invested." Since I started our family … [Read more...]

Yields Resume Their Climb

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Yields for 10-year Treasury securities surged from mid-May on, but retraced their steps on Thursday the 19th, but on Friday resumed climbing. On Friday yields began heading higher once again. … [Read more...]

Worthy Reads: Wal-Mart Cheers Investors

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Wal-Mart Cheers Investors (WSJ) Here’s what’s behind America’s renewed mania for home renovation (MarketWatch) Burning Question: Is ECB Struggling to Buy Peripheral Bonds? (WSJ) Fighting Corruption Critical for Growth and Macroeconomic Stability (IMF) Time to Put China’s Currency Back on Worry List (WSJ) Has the pricing of stocks become more global? (BIS) U.S. and Japan Heading for Yen Standoff (WSJ) The Fed Has Something to Prove to Wall Street (Bloomberg)   … [Read more...]

Sorry, The Game is O-V-E-R for these 2 Mutual Funds

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The game is over for the Putnam Capital Spectrum and Equity Spectrum funds. Sorry to be so harsh. But that’s simply the way I see it. Not to pat my own back but I’ve pointed out in the past how Putnam has been guilty of being more of a marketing machine than a Prudent-Man oriented asset management firm. After reading this excellent blog by Jason Zweig in his WSJ Intelligent Investor column, I feel even stronger about Putnam's focus on marketing over Prudent-Man-type asset management. Zweig points out that these funds hold close to three-quarters of their assets under management in their top … [Read more...]