Last night, I learned that a friend of mine shifted all his money out of US markets and into international stocks -- because of fear of US stock market turmoil.
I couldn't think of a worse move. First, it's a little bit of chasing performance -- which never works. For years, international markets were the worst place to put your money. Lately, they've been on fire. And, with every advisor now saying to up your % of foreign stocks, you know the writing is on the wall. Also, it's not like every country out there is going to do better if America is dragged down.
Second, as the markets proved today, it's naive to think that the stock markets aren't interrelated in today's age of GLOBAL trading, sovereign funds, etc.
Monday, January 21, 2008
Thursday, December 13, 2007
Martin Wolf...
...stole my headline...
"Why the credit squeeze is a turning point for the world" from the Financial Times. "Turning point" is actually a bit more strenuous a term compared to my more gentle "Inflection point".
His column is spot-on & describes things exactly as I've been observing them...
"Why the credit squeeze is a turning point for the world" from the Financial Times. "Turning point" is actually a bit more strenuous a term compared to my more gentle "Inflection point".
His column is spot-on & describes things exactly as I've been observing them...
An Inflection Point
I've been too busy at work for the past few months & unable to collect thoughts into post-able format...but that doesn't mean I haven't been keeping tabs on the craziness since late Summer/early Fall.
Today, Calculated Risk had a post on the Commercial paper market which linked to some Fed charts. He used one chart in his post, but I think this chart from that webpage is more interesting. Look at the amount of recent disruption. Greater than the 9/11 attacks.
The more I read about the underpinnings of our financial credit systems over the past couple months, the more worried I've become that we are heading into a serious crisis. After this past week, it seems the Fed & other central banks think the same thing. Nonetheless, it's clear that the average retail investor & the average US citizen has no idea what's afoot. The swirling currents of this whirlpool are too confusing to understand & the safe harbors all turn out to be swamped.
Will it all subside into calm?
Today, Calculated Risk had a post on the Commercial paper market which linked to some Fed charts. He used one chart in his post, but I think this chart from that webpage is more interesting. Look at the amount of recent disruption. Greater than the 9/11 attacks.
The more I read about the underpinnings of our financial credit systems over the past couple months, the more worried I've become that we are heading into a serious crisis. After this past week, it seems the Fed & other central banks think the same thing. Nonetheless, it's clear that the average retail investor & the average US citizen has no idea what's afoot. The swirling currents of this whirlpool are too confusing to understand & the safe harbors all turn out to be swamped.
Will it all subside into calm?
Tuesday, December 11, 2007
Bill Nygren: A Space Odyssey
Bill Nygren, the value investor hailed by Morningstar as the Domestic Fund manager of 2001, is lost in deep space.
For the past few years, he has been loading up on WaMu stock telling anyone who will listen what a bargain it is. Has he been paying attention to ANYTHING? Even my own tax preparer told me last year: "I don't know much about stocks, but I do know the loan process out here is a joke and I would never invest a dime in WaMu." The writing was on the wall long before FBR and Citi analysts questioned their staying power (link).
We are talking about the 2001 manager of the year here. The cream of the crop. What kind of analysis is he doing? Is he really doing due diligence for his shareholders? Last I checked, 13% of Select's holdings were in WaMu and the fund is down about 7% this year! His fourth largest holding, HRB, is an equal mess!
This is one of the many examples of when the so-called "smart" money is not so smart. Sure, they have CFAs and awards, but do they have common sense? Can they see the forest from the trees? Sure, it is only one year (unless you want to bring in his under-performance in 2004, 2005, and 2006), but, then again, 2001 was only one year.
For the past few years, he has been loading up on WaMu stock telling anyone who will listen what a bargain it is. Has he been paying attention to ANYTHING? Even my own tax preparer told me last year: "I don't know much about stocks, but I do know the loan process out here is a joke and I would never invest a dime in WaMu." The writing was on the wall long before FBR and Citi analysts questioned their staying power (link).
We are talking about the 2001 manager of the year here. The cream of the crop. What kind of analysis is he doing? Is he really doing due diligence for his shareholders? Last I checked, 13% of Select's holdings were in WaMu and the fund is down about 7% this year! His fourth largest holding, HRB, is an equal mess!
This is one of the many examples of when the so-called "smart" money is not so smart. Sure, they have CFAs and awards, but do they have common sense? Can they see the forest from the trees? Sure, it is only one year (unless you want to bring in his under-performance in 2004, 2005, and 2006), but, then again, 2001 was only one year.
Wednesday, November 28, 2007
MONSTER QUARTER
ATW reported a monster quarter today.
This is a company selling at 10x next year's earnings BEFORE this quarter happened. And, it has a peg ratio of 0.28 -- among the lowest I have seen.
Who in their right mind is discounting this company? This right here is an argument against the efficient market hypothesis (some of my other arguments would include any of the failed biotechs that never earned a cent). Aside from their relative valuation, common sense dicates that the big oil companies have the money AND the incentive to look for more oil. And, this company, among others, stands to reap some massive rewards.
I don't understand why they are trading at these levels. I see them much, much higher in 2008 and 2009 even if China stops growing and oil drops to $30. Someone needs to get the oil outta the ground.
This is a company selling at 10x next year's earnings BEFORE this quarter happened. And, it has a peg ratio of 0.28 -- among the lowest I have seen.
Who in their right mind is discounting this company? This right here is an argument against the efficient market hypothesis (some of my other arguments would include any of the failed biotechs that never earned a cent). Aside from their relative valuation, common sense dicates that the big oil companies have the money AND the incentive to look for more oil. And, this company, among others, stands to reap some massive rewards.
I don't understand why they are trading at these levels. I see them much, much higher in 2008 and 2009 even if China stops growing and oil drops to $30. Someone needs to get the oil outta the ground.
Tuesday, September 25, 2007
Apple vs Amazon
Ah, now the runup in Amazon's stock makes sense. They're pricing in online music market share!
Oh, and they've got a better product than Apple! DRM free?! Sign me up. I think Itunes is just good for podcasts at this point.
Article
Oh, and they've got a better product than Apple! DRM free?! Sign me up. I think Itunes is just good for podcasts at this point.
Article
Fox versus the NYTimes
You have to hand it to Rupert Murdoch. He took the NY Times in his crosshairs, and he is taking them down. Business at the NYTimes is going downhill.
And, I believe it has to do directly with the Fox News Network. They never miss an opportunity to smear the 'liberal, far left leaning' Times -- especially O'Reilly. They've polarized their audience so far in one direction that no self-respecting Republican would read the Times. Amazing work.
If Mark Cuban uses ShareSleuth to trade off of, I can see Murdoch using his own new financial news channel to further his economic agenda -- say, talk up oil shortages if he wanted to move up the price of oil. Talk down whole countries if he wanted to move in and get assets on the cheap. I don't think he's above it. Scary shit.
And, I believe it has to do directly with the Fox News Network. They never miss an opportunity to smear the 'liberal, far left leaning' Times -- especially O'Reilly. They've polarized their audience so far in one direction that no self-respecting Republican would read the Times. Amazing work.
If Mark Cuban uses ShareSleuth to trade off of, I can see Murdoch using his own new financial news channel to further his economic agenda -- say, talk up oil shortages if he wanted to move up the price of oil. Talk down whole countries if he wanted to move in and get assets on the cheap. I don't think he's above it. Scary shit.
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