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Mutual Funds
As discussed in our last newsletter, value stocks have roared back strongly to outperform struggling momentum stocks over the last two weeks.  This is only two weeks, but it is worth discussing, because it augurs to how we see the market in the future.  How can we generate the returns we are targeting of double-digit,...
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Over the last week, value stocks have poised very impressive gains, while many of the momentum names have really struggled.  This is obviously very good for our deep value investment portfolios.  I want to emphasize, we should never get too excited or upset by short-term performance metrics.  With that said, value stocks are as cheap...
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As we sit in year-7 of a historic bull market, with earnings likely to decline for the 3rd consecutive quarter, the lack of a margin of safety in most stocks, bonds, and real estate is becoming painfully obvious. The Federal Reserve’s record-low interest rate policies have driven all asset classes higher, to levels where the...
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If one studies the history of financial markets, a consistent theme emerges. Short-term fads tend to dictate short-term performance, but long-term performance is determined by value and fundamentals. There are periods where prices flat out do not make sense, either for the market as a whole or for individual stocks and sectors. The current investment...
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In perusing the WSJ today, an article caught my eye. The venerable Charles Schwab has become the latest company to discontinue offering load mutual funds, where investors pay what generally is a high commission in addition to regular fund fees, as a result of the new Department of Labor law requiring brokers to act as...
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From the 1964 Buffett Partnership Limited Letter: “In looking at the table of investment company performance, the question might be asked.  ‘Yes, but aren’t those companies run more conservatively than the Partnership?”  If you asked that question of the investment company managements, they in absolute honesty, would say they were more conservative.  If you asked...
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“Diversification is protection against ignorance, but if you don’t feel ignorant, the need for it goes down drastically.” – Warren Buffett   Probably the biggest misconception of the financial services industry is the idea that there is a direct correlation between diversification and safety.  This might apply to an advisor that doesn’t perform extensive research...
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Below is an interesting article on mutual funds and the mistakes made when market participants purchase them.  It is known in the industry that the actual investors in mutual funds tend to have far worse performance than the actual funds, due to their tendencies to jump in at the tops, and out at the bottoms....
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I think Wells Fargo (WFC) is making the right move by attempting to double their asset management business within the next seven years.  Asset management is not a capital intensive business and it is very scalable so I’d expect the company to be able to increase profitability as it grows.  Wells Fargo also has the...
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This article correctly points out the ridiculousness of investor paying loads on funds.  It significantly reduces your principal and us usually a terrible idea, particularly if you aren’t likely on holding the fund for at least a decade.  Very few of the best mutual funds charge load fees so if your advisor is pitching you...
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