Three great points; another reason to concentrate on EV instead of market cap, cash is more a risk than an asset and show us the money. Stop hording our cash! Graham recommending putting the dividend payout to a vote each year and management having to justify any capital expenditures. I implemented capital investment management in, gosh at least a dozen companies, and truth be told not one really had a tight grasp of or even a good process for managing their major expenditures.

As the chart highlights the elastic band is very stretched.

It’s three months since I last posted the performance of the S&P/ASX 200 Sectors, so time for an update. The major change over the last three months is Financials have come from behind to take a convincing lead. They’re followed by a reasonably predictable list, if you subscribe to sector rotation theory; industrials, consumer discretionary, information technology, materials and energy.
S&P/ASX 200 Sector Performance [Click to Enlarge]
I posted the sector vs market cycle here and this recovery continues to play out roughly as predicted. The issue most investors have with these types of …

We may be seeing green shoots or maybe they are yellow weeds as Roubini suggests. To me that’s all noise and I wonder why so much of the blogosphere and media is full of speculation on such matters. As even the best economists have a poor predictive track record, why should an average punter like me even bother thinking about it? There are easier and more profitable things to think about, but each their own.

Perhaps some people will ask why bother looking at historical market data. My simple answer is big picture reassurance. The main reason is that I do not want to get bogged down in the here and now of unemployment reports and the like, such stats are psychologically damaging and cloud the mind. They induce fear and you don’t want to go there. The conspiracist in me believes they are promulgated to confuse poor investors and make them freeze instead of act. I say, stand on giants shoulders to get a better view of the future so that you may act now.

A few friends have been asking me whether they should invest now. In general I suggest indexing utilising market timing to further enhance dollar cost averaging. A friend cut me short the other day and asked what an index fund was. It is amazing what you to start to take for granted when you’re familiar with a topic.
The S&P 500 is an actively managed market-value-weighted index. It represents the best large companies in America, not simply the largest by market cap, sales or any one measure. It has been been …