Stocks
The Loser’s Game
Professionals win points while amateurs simply beat themselves. The same applies to investing.
In 1975, Charles Ellis wrote a wonderful paper titled “The Loser’s Game.” He observed how very difficult it was to be a successful investor, much less “beat the market.” One of the problems he noted – true then and even more so now — was that the market was increasingly becoming dominated by institutional investors — those who had billions of dollars to spend on research, information, access, traders and innumerable other advantages over an individual. How could anyone ever realistically hope to compete against that?
The Gold Standard
Gold is the ultimate insurance policy to protect against the ongoing decline of the dollar.
What’s up with all of the schlock adds on TV exhorting you to buy gold? Where were they 10 years ago when gold was still languishing at under $300 per ounce?
Shaking the Money Tree
Wednesday, November 24, 2010
Say what you want about the current level of stock prices, but at 22 times earnings, stocks are anything but cheap.
Never underestimate Wall Street’s ability to shake the money tree. The newest pitch can be seen in this recent note sent out by a local brokerage to clients and prospects:
“…there have only been three 20-year trailing periods since 1926 where bonds have outperformed stocks: 1912-1932; 1930-1950 & 1989-2009. In each 10-year period following these 20-year periods of underperformance, the average increase in the U.S. stock market was 19.8%% per year!!
Source: The Leuthold Group/Calamos Advisors
Secondly, whenever the stock market returned less than 5%/yr. for any 10 year period, the next 10 year average annual return was 13%...with a range of 7% to 18%...without exception!!
Source: Davis Funds”
Enough!
Wednesday, August 25, 2010
Written by Bo Billeaud
For some people, money has that seawater effect — the more you drink, the thirstier you get. And in their quest for more, they often end up with less.
Here’s a true story. The late Joseph Heller was once at a party with his very good friend, Kurt Vonnegut, given by a billionaire financier. After noting the opulence of their surroundings, Vonnegut turned to Heller and asked, “Joe, how does it make you feel to know that our host, only yesterday, may have made more money than your novel Catch-22 has earned in its entire history?” Heller is reported to have replied: “Well, that may be, but I’ve got something he can never have.” Vonnegut asked, “What on earth could that be?” And Heller said, “Enough.”
Revaluing Wall Street
Wednesday, June 30, 2010
Written by Bo Billeaud
If the growth rate of our economy does in fact slow going forward, the possibility of revaluing stocks (again) should not be ignored.
After enjoying an 18-year run (1982-2000) that carried stock prices (S&P 500 stock index) up by nearly 15 fold, stock market investors have now endured more than 10 years of one of the most difficult investing environments ever...
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