...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...
Thursday, December 13, 2007
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.
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