Last week I wrote about my ten favourite fund managers letters. Writing about those letters made me realise how reliant I have become on RSS feeds and email. One of my favorites from that list don’t offer an RSS or email option. Consequently a month can fly past before I remember to check the site.
Well no more I say! To ensure I read the invaluable Hussman Funds Weekly Market Comment and to provide it via RSS feed and hopefully via email, I will link John P Hussman’s weekly comments here.
This week is ominously entitled Something is About to Give
“The stock market remains relatively overbought in an unfavorable Market Climate, which continues to pose substantial downside risk… There’s a relatively high degree of complacency here, reflected by the suppressed level of implied volatility and the general consensus that bad news has been priced into stocks…
In short, I remain convinced that the market has not yet priced in the recognition that the U.S. economy is in a recession. To the extent that such recognition hasn’t occurred yet, there’s a risk that significant downside will be realized at the point that investors capitulate to that view.
The residual (and I believe, misplaced) confidence that the U.S. has dodged a recession, coupled with a growing recognition that foreign economies are turning lower, has triggered a burst of surprising strength in the U.S. dollar over the past couple of weeks.” Read more at Hussman Funds
Guru Focus has recently launched 10 year financial data and charts.
You can check it out here.
The best part appears to be the ability to click on any row to get a chart, like this
This is not a revolutionary development as investors already have free access to 10 year data and charts from the likes of Morningstar. However I do like the format and quick charting that Guru Focus are providing.
This book is a foil to those financial gurus who eschew top down investing. As it says on the cover this is “The Investor’s Guide to Profiting from Market-Moving Events”. Peter Navarro embraces the big picture macrowaves and he has some heavy hitters in support. The book leads off with the following quote from the legendary Jim Rogers and I’d be surprised if George Soros is not mentioned.
“Money supply, government deficits, trade deficits, inflation figures, the financial markets, and government policy. I look all those things for the U.S. and key foreign countries as well. It is one big, three dimensional puzzle…” Jim Rogers
That is in essence what this book is about. The inputs required and steps to develop a macro investing thesis. If you prefer sticking to bottom up investing and don’t care to know how other market participants are playing the game then don’t bother reading this book. I think everyone else will find something of interest.
Part 1 contained some interesting background material on economics and I’m sure much more. Part 2 covered the nuts and bolts of microwave investing. Part 3 put microwave investing in to practice.
One of the cornerstones of my investment philosophy is
capital is scarce while opportunities are bountiful.
Therefore, it should come as no surprise that Chapter 8 Ten Rules to Protect Your Capital caught my attention.
The following rules are controversial and a quick search will uncover numerous retorts to each rule. Whether you agree with or find these rules applicable to you will depend on your investment style. However, every investor would be wise to consider these rules and write down their thoughts on each.
The Macrowave Investor’s Money Management Rules
Efficient Trading
Cut your losses
Set intelligent stop losses
Let your profits run
Never, ever, let a big winner become a loser
Never average down on a loser
Conquer the urge to overtrade - don’t churn your own portfolio
Efficient Ordering
Never use a market order before the opening bell or with a new IPO
Use market orders to capture the price movement in a trending market
Use limit orders to capture the spread in a trading range market
Never chase a stock
Minimize Trading Costs
Think round-trip on your commissions - not one way
Choose the right broker - read the fine print
Raining in Brazil has plenty to offer, even to investors like me who find the details in economic reports more than a bit boring. The following graph of the business and stock cycles is one of what looked like many “keeping it simple” ideas to apply.
Looking at this graph, what stage of the business and stock cycles do you think we’re in? Will thinking about this graph change your current investment focus?
Oplink Communications, Inc. (OPLK) financial results fourth quarter ended June 30, 2008
Five analysts are predicting eps between $0.09 and $0.11, consensus of $0.10.
For those focused on eps this figure will compare poorly to last years $0.23.
Fast forward -> Results are now in and they’re great.
Good results, turnaround occurring, great upside potential in this well managed cash rich company.
The two main reasons I find oplk attractive are they make money and they mange that money well. Add in growth, OCP turnaround potential with proven management at helm Continue reading →
I decided to invest some of my profits from selling OHI into buying a trading position in Suntech Power Holdings Co. Ltd. (STP). Back in mid June I flagged that I would wait patiently for STP to come to the value point I wanted…and here it is.
STP has once again fallen to a value point I couldn’t ignore. After a quick refresh of my due diligence I have gone overweight in STP. [Neither OHI nor STP are held in the FI Portfolio] The following notes are my half edited notes with half my thoughts.
Why is STP so cheap? With a PEG of 0.55, healthy margins and Continue reading →
Omega Healthcare Investors Inc. (OHI), has been volatile since July 07.
Check out this chart to view the wild rollercoaster for this boring REIT. With those recent extremes I shouldn’t be surprised about the ride over the last four days. OHI closed last Wednesday at $17.84, it announced OK Q2 earnings Thursday morning and the conference call later that morning was likewise mixed by largely positive looking forward. Yet OHI closed down 3.5% at 17.22. Then on Friday OHI climbed 4.8% followed by a 4.5% climb today. These are big moves for a boring REIT, which chugs along increasing funds from operation (FFO) and dividends most quarters.
Look at this dividend chart or go back and check some of my posts on TMF for quarterly history and the one thing that jumps out is the predictability of these dividend increases. To make it even easier I’ve posted dividends, adjusted FFO and payout ratio below. Continue reading →
Fund managers are generally happy to share their views. Their letters are often a great source of investment wisdom. While Buffett’s Berkshire Letters get the lion’s share of focus, many other fund managers provide valuable insights for investors.
I wrote about Howard Marks of Oaktree yestersay. That is his first letter that I have read and I look forward to reading more.
Most Friday’s I drop my daughter at dance class, head to one of Melbourne’s best cafés and have a latte while I wait for Borders to open at 10. I then have around 20 minutes to choose and scan an investment book. While I am normally a slow reader I can skim a book in 20 minutes and pick out a few lessons which resonate with me.
Today my book of choose was Way of the Turtle, by one of the original turtles, Curtis Faith.
Almost every page I scanned contained a gem. From the introduction where Faith said he has learnt something from almost everyone he has every interacted with to his thoughts on edge and his simple clear rules. Continue reading →
Given today’s general dearth of beaten-down assets outside of residential real estate and financial institutions, investing gradually probably won’t cause you to miss great opportunities. But it will keep you out of trouble and ensure that you have capital with which to take advantage of any bargains ahead. In my book, going slow here makes the most sense.
You can read the whole 12 pages here, I assure you it will be time well spent.
It is good to see my current thinking and portfolio stance validated, yet at the same time this train of thought is getting close to the consensus. Everyone is predicting a slow global economy until at least 2010. Can they all be right?
This book is a foil to those financial gurus who eschew top down investing. As it says on the cover this is “The Investor’s Guide to Profiting from Market-Moving Events”. Peter Navarro embraces the big picture macrowaves and he has some heavy hitters in support. The book leads off with the following quote from the legendary Jim Rogers and I’d be surprised if George Soros is not mentioned.
