TUP’s report was weak.
Dump it fast. Buy it back when it’s cheaper, maybe.
Lesson: This stuff is hard to predict. Take your losses quickly and move on. (In this case, I actually had a small profit.)
Second lesson: Don’t be wedded to stocks that don’t perform. There’s no such thing as the long haul. Buy and Hold is dead. It’s now Buy and Check, Check, Check .
Learn to hate: There are industry swaths I won’t touch — oil services, miners, biotech, mortgage REITs and financials. Too hard. Too many gotchas.
There are a handful of exceptions, like GILD, SAN, and, of course, V and MA.
There are industries I love: food (WFM, WEN, COST) and hot technologies, like GOOG, AMZN and (now) AAPL, again.
I don’t like cockroach stocks — like JPM. I know they took a $28 billion writeoff a few years ago for stuff like this latest $13 billion… But then there’s the mess with Madoff and all the bad press the bank and Mr Dimon are getting. Who needs it? Do I? No.
There’s something happening at JCP. God knows what. All the big guys have sold. Now it’s edging up. It’s a gamble.
Are money managers any good? Some are. Most aren’t. That’s my experience trying to invest the money I got from the sale of the business 16 years ago. I found one brilliant one. But he made so much money for himself (and me) he retired to Scottsdale, Arizona, gave me my money back and said “Good luck.”
I haven’t found anyone as good since, though I know they’re out there — somewhere. I have a big position in BRKA. But it’s getting so large it’s hard for Warren to bring in big percentage gains.
Lesson: Learn enough to do it yourself. That’s what I’ve been doing. Writing about it — in this daily column — helps Harry think it through.
It’s neither easy, nor especially satisfying. I’d rather be living on muni bonds and playing tennis four hours a day. But many of my bonds have been called and replaced with low-interest bonds no one (including me) can live on. All that’s remaining is equities in the stockmarket (and some real estate syndications and some miniscule “gamble” private investments).
Lately my equities have skyrocketed. This worries me. Nothing lasts forever.
Today is the biggest earnings reporting day of the year. It should give us a good idea of what CEOs see going forward. So far it looks OK (except for Caterpillar). I pray someone will speak some sense to Washington. Their muddling is seriously affecting confidence in business and confidence in the U.S.
You don’t need charts to tell you how bad most professional money managers are. But here’s a few colorful ones and the words that came with the big chart below:
The Myth of the Successful Money Manager
There is no such thing as a fail-proof investment, no matter who’s looking after your money. Some of the best investors of our time (Warren Buffet, Bill Miller) have lost large amounts of money over under-performing businesses and investments within the last 10 years. Hiring a professional investor may seem like a smart move, but according to today’s infographic, “the average professional money manager is doing worse than the market.”
Buffet’s company Berkshire Hathaway has slipped recently with its expected performance in the market. And between 2006 and 2008 Bill Miller’s funds lost 54%. It seems that hiring a money manager for investments might just be a poor investment in itself.
It should also be noted that the cheapest funds are actually the most successful. “Star ratings” of funds and similar tactics don’t provide much guidance. “Persistence of performance among past managed fund winners is no more predictable than a flip of a coin.”
With this in mind, if you’re thinking about future investments, you might just be better off doing your own research and using your intuition. You may have to spend money to make money, but it may be wise to keep your money out of the hands of so-called “professionals.” [Business Profiles]
The parable of Washington.
An Indian walks into a cafe with a shotgun in one hand pulling a male buffalo with the other. He says to the waiter: “Want coffee.” The waiter says, “Sure. Coming right up.” He gets the Indian a tall mug of coffee……
The Indian drinks the coffee down in one gulp, turns and blasts the buffalo with the shotgun, causing the animal to splatter everywhere and walks out.
The next morning the Indian returns. He has his shotgun in one hand, pulling another male buffalo with the other. He walks up to the counter and says to the waiter: “Want coffee.”
The waiter says “Whoa! We’re still cleaning up your mess from yesterday. What was all that about, anyway?”
The Indian smiles and proudly says, “Training for position in United States Congress: Come in, drink coffee, shoot the bull, leave shit for others to clean up, disappear for rest of day.”
Harry Newton who could never imagine that, in his decrepit old age, he would feel such affection for — of all things – a dog called Rosie.
PDN PhotoPlus show opens this morning at New York’s Jacob Javits Center. It’s our biggest photo expo of the year. It will show all the new stuff and put you instantly into the poorhouse, if you buy any of it. Leica is selling one camera for $35,000 and Hasselblad has cameras for twice that, and more.
“Learn to hate: There are industry swaths I won’t touch — oil services, miners, biotech, mortgage REITs and financials. Too hard. Too many gotchas.”
You do realize that you have two mortgage REITs (NLY and RWT) and two financial companies (SAN and WF) in your list of liked stocks?
As for the article about money managers, I cautiously agree. However, the article doesn’t give a fair comparison between the “market” and money managers. Simply comparing returns isn’t fair. By that logic, since bonds will almost certainly return less than stocks over long periods of time, you shouldn’t own bonds. The article should really focus on risk adjusted returns as well as break up the markets and managers into comparable sectors.
Money managers have their place. Most aren’t worth their fee but some are. You should pick a manager just like you pick a stock, through diligent research and analysis. Even a decent manager can add lot of diversification to your portfolio, especially if they are in a sector or strategy you can’t access through other means such as forex, commodities, merger arbitrage, distressed opportunities, and model based investing.
P.S. I guess enough people thought that Facebook allowing beheadings to be shown on the site but not tits was illogical that Facebook reversed course and is now allowing tits to be shown too…oh wait, nevermind, they just re-banned beheadings…too bad.