I have been investing since the spring of 1964, and I do not remember being as uncomfortable with the health of the financial markets as I am today. Given that unpleasant prelude, I also want to advise all investors that my own investing position has not changed since I began investing 53 years ago. I do not market time, i.g., moving in and out of the markets. I pay zero attention to daily, weekly or monthly price movements and have never made an earnings projection in my life. I do not keep tabs on the exact value of my own account. My assets are spread around with custodial friends … [Read more...]
You’ve Read the Last Issue of Intelligence Report: Dave Hammer on WD-40
Turns out you can survive and thrive with WD-40 in your pantry drawer and your portfolio. “During my 14-year run in the institutional research and trading business in Boston, the finest analyst with whom I worked was oil analyst Dave Hammer. Since 1990 Dave has been the managing partner of Hammer Asset Management. We stay in touch to this day,” explains Dick Young. You can see why from his interview in the September 1987 issue of Richard C. Young’s Intelligence Report (excerpt found below). (Edited for length and clarity) This Month’s Special Guest David Hammer He plays … [Read more...]
Trust in Money, Store of Value
How is the trust level in our current monetary system as a “store of value?” Not good, especially if the price of bitcoin or record art sales are any indication of investors looking for places to stash their money. Da Vinci Christ Painting Sells for $450 Million Bloomberg's Katya Kazakina writes: “Jesus Christ.” That was the reaction of mega art dealer Larry Gagosian after a rediscovered painting by Leonardo da Vinci became the most expensive work ever sold, soaring to $450.3 million at a Christie’s auction in New York on Wednesday. Alex Rotter, the auction house’s … [Read more...]
The Truth Behind the S&P 500: Part IV
This is the time of year when you need to be extra careful about what you invest in, especially when you’re buying a so-called passive index fund that tracks the S&P 500. I have many concerns about the S&P 500 index approach, as I point out here, here, and here. Add one more issue to the list: “Passive” investors paying for someone else’s actions. Recently, the PNC S&P 500 Index Fund announced it will pay out $4.19 in cap gains per share, as pointed out in by Jason Zweig in his weekly WSJ column The Intelligent Investor. “This week, the fund’s per-share value was around … [Read more...]
The Market for Quarterbacks Looks Bullish to Me
As you can see below, it’s good to be a quarterback in the NFL. Here are some of the top NFL salaries at quarterback position this year: It will be interesting to see what type of contract the 49ers offer former Patriots backup Jimmy Garoppollo. Keeping him on the Patriots' roster, in the end, was too expensive—to the tune of twenty some odd million dollars a year—to wear a headset. OverTheCap.com's Jason Fitzgerald (as pointed out by Ben Volin of the Boston Globe) believes that the 49ers will likely get Garoppolo for around $21 million next year which is what Brock Osweiler got … [Read more...]
The Truth Behind the S&P 500, Part III
“Welcome aboard!” For some reason, maybe it’s because of all the cruise ships that have visited Newport this Fall, I’m thinking about the S&P 500 as this huge cruise ship. Imagine the guests are common stocks, and to go ashore everyone is assigned to a small water taxi based on their size, or market-cap. The biggest companies, are in one water taxi. It barely floats from all their weight. Imagine that sinking water taxi, with its bow barely above water, steaming to shore with its five biggest guests: Facebook, Amazon, Apple, Google, and Microsoft. That water taxi is followed by the … [Read more...]
Are your Part of the Market’s Most Crowded Trade?
The FT reports that investors are dumping money into technology stocks at the fastest pace since January. No surprise there, as tech shares are the best performing sector in the market YTD. The quarterly performance comparison crowd and those who feel they have somehow missed out are chasing return in the sector. If you are an index-based investor (that includes ETFs), tech is your biggest sector exposure and the FAANG stocks are amongst your largest individual positions. Tech stocks have posted blistering gains this year. The MSCI World information technology index, which covers big and … [Read more...]
How it Feels to be Rich like Bezos
What makes Jeff Bezos tick? You. From the very beginning Jeff Bezos has always been about the customer. And that ethos flows through the company like a package from your computer to your doorstep. To Bezos, if the customer isn’t satisfied, what’s the point of being in business? And the Smith house is satisfied. At times it feels like an Amazon fulfillment center with all the boxes. How does Amazon do it? Driving past the gargantuan Amazon building in Fall River, MA, going 70 mph, it literally takes several seconds. It’s sheer size is breathtaking. It looks like it belongs in another … [Read more...]
This is Why High Growth Stocks are Dangerous
FAANG stocks continue to dominate the performance of markets YTD. Netflix hit a new all-time high again today after announcing it would raise prices yesterday. Better now than in 2019 when Disney pulls its content from Netflix. Facebook is bordering on all-time highs as are Amazon and Tesla. Tesla isn't a FAANG stock, but the investors who buy it are of the same ilk as those who buy the FAANGs. High growth stocks are for sure exciting to invest in. They are innovators and disruptors and often on the cutting edge of new technologies. Everybody wants to invest in the next big thing, but far … [Read more...]
Can One Man Manage all this Money?
Investing legend Ray Dalio runs Bridgewater Associates. He's been making the rounds, hawking his book, Principles, and controlling the fate of his hedge fund clients' $160 billion. Dalio practices a form of "radical transparency" at his firm, but Andy Kessler writes that the techniques Dalio uses to enforce transparency may be backfiring on him. The core of investing is quite simple: Determine what everyone else thinks, and then figure out in which direction they are wrong. That’s it. No one tells you what they think. You’ve got to feel it. That’s why Wall Streeters say things like, “We are … [Read more...]
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