Before the bell on Monday, 5/7/2012, Warren Buffett announced that he’d eagerly acquire shares in two major U.S. corporations. Yet tech standouts like Apple (AAPL) and Google (GOOG) aren’t on his “buy list.” Maybe they should be. According to Birinyi Associates, the current price-to-earnings ratio of the Dow Industrials is 14.5. For the NASDAQ 100? 11.8. Mr. Buffett [...] Continue Reading...
Foreign stocks returned to their winning ways in the first 10 weeks of 2012. By mid-March, however, economic data out of China started to demonstrate sluggishness. A rapid rise in Spanish bond yields began threatening the country’s ability to manage its own finances. And European interbank lending ground to a halt. Nevertheless, as recently as Tuesday (May 1), many commentators [...] Continue Reading...
In early October of 2011, U.S. economic data appeared bleak. The sovereign debt crisis in Europe seemed perilously similar to the sub-prime mortgage catastrophe. And U.S. stocks via the S&P 500 struggled to maintain a grip on the 1100 level. Six months later, analysts are tripping over themselves to describe the U.S. economy in extremely positive terms. European recession fears [...] Continue Reading...
In the first two months of the year, SPDR Dow Jones Industrials (DIA) garnered 6.5% and the underlying benchmark made a successful run at 13000. It was a phenomenally fast start that persuaded many investors with cash on the sidelines to reconsider. Perhaps surprisingly, foreign stock ETFs dramatically outperformed domestic counterparts in January and February. For example, Vanguard Emerging Markets (VWO) raked [...] Continue Reading...
Month-over-month, most sector investments have provided investors with ample capital appreciation. Country ETFs with ties to technology, energy and infrastructure have all performed admirably. Yet there are a variety of areas of weakness that cannot be disregarded as inconsequential. For instance, in my February commentary on underachievement in the transportation arena, I highlighted the concerns with the Dow Industrials Average [...] Continue Reading...
With the S&P 500 garnering 4.6% in less than 3 weeks, are money managers becoming skittish? If hundreds of millions flowing out of a few select ETFs is any indication, then the answer is, “Yes.” On 1/19/2012, institutional advisers used their block accounts to dump roughly $120 million of iShares Russell Top 200 Growth (IWY) and $80 million of [...] Continue Reading...
How do “value” gurus determine worth? Bill Miller spent 30 years at the helm of Legg Mason Value (LMVTX), buying companies that he believed were deeply discounted. This often meant that he would purchase shares of a company where the market had priced the shares less than what was on the accounting books; sometimes, he might acquire shares for less [...] Continue Reading...
I represent hundreds of families as the president of my Registered Investment Adviser, taught financial concepts to classrooms around the world, spent years as the CFP on a national talk radio show and receive countless e-mails from wisdom seekers. Yet I would not be able to tally the number of investors who I have encountered in my lifetime. However, there [...] Continue Reading...
Everyone seems to recall the phrase, “irrational exuberance.” The description is most frequently tied to the dot-com frenzy and subsequent bursting of the info-tech bubble at the turn of the century. Yet Fed Chairman Alan Greenspan first uttered the words on December 5, 1996. In fact, it took nearly 4 more years before the stock balloon popped in March of 2000. [...] Continue Reading...
The bear has been ruthless to investors in Chinese companies. For example, from an early November 2010 multi-year peak to an October 2011 valley, the iShares FTSE China 25 Fund (FXI) plummeted -36.6%. Since those October 3 lows, however, several facets of the Chinese “story” have become more favorable. First, analysts worldwide began upgrading China stocks [...] Continue Reading...
