The Buy and Hedge Fund called the ValueAligned Fund is up +11.8% for the year. It is down a bit -0.8% in June. That compares to other stock hedge funds that are up +5.7% and are down -0.8% in June so far. The Buy and Manage Folio account called the ValueAligned Portfolio (VAP) is up +18.4% so far this year, up 0.5% in June, which compares to the S&P 500 with its dividends reinvested up +16.3% for the year, up 0.8% in June.
The natural gas boom has already upended the American power industry, displacing coal and bringing consumers cheaper electricity.
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In 2006, Congress passed the Pension Protection Act. Among the objectives of that legislation was to address several major problems then occurring within 401k plans. One of those snags dealt with retirement investors’ tendency to be too cautious with
their long term investments. We call this Common Mistake of Retirement Investors “Over-Cautiousness.” It means sacrificing long-term return for short-term “safety.” You’ll see why we put that last word in quotes a few paragraphs from now. First, a few facts you be interested in knowing.
Continue reading "3 (Bad) Reasons 401k Investors are Over-Cautious" »
When I saw this headline yesterday, I had to a laugh for two reasons:Gurus and their guesses make for great headlines. But here’s the part that the headlines (and the gurus) glossed over:
- Apple naysayers (i.e., gurus) will have a field day claiming they were proven right; the stock is in “decline.”
- Investors looking for the “best” investment will tell themselves that Apple’s time has passed.
Think about that for a minute. Apple’s stock didn’t drop because they revealed some horrible news like a ship sank with the next 20 million iPhones on board. Instead, the price drop was attributed to Apple not meeting analysts’ forecasts.Apple is a ginormous corporation that just set company records for revenue, earnings (barely, and that's the worry for some investors), iPhones sold, and iPads sold in a quarter.
And this is the trap that trips up gurus and investors alike. Focusing on a single detail rarely gives you enough information to make a decision. By focusing on the individual trees instead of the forest, we don’t stop to ask the questions that should matter, like:
So the next time you see a headline that touts a guru’s prediction or hints that something great no longer is, do me a favor. Take a look around and see if the headline actually helps you answer a question that matters or just makes you feel more anxious.
- Does owning Apple stock make sense based on my plan?
- If I own Apple stock, do I have a plan that takes the emotion out of owning it?
At that outstanding, almost unimaginable level, everyone who doesn't own a home should be willing to stand in line outside a bank for however long it takes to qualify for a mortgage, and then turn around and buy just about any home on the market. The Fed has succeeded in creating the housing market's biggest "blue plate special" of all time. Come and get it! A once in a lifetime opportunity to lock up unbelievably low fixed-rate financing and buy a home at a price that's not going to last much longer.
The era of 1950 to 2000 loaded up large-cap corporations with a lot of baggage - like union dominance and outsized benefits that eventually built up to large unfunded debts. But those problems were swept under the rug until 2000's dramatic bursting of that bubble led investors to start peeking under that rug and they didn't like what they saw.
In the chart below (which we update on our website each day for subscribers), we compile the "relative valuation" of large-cap stocks versus small-cap stocks. This measurement simply takes the earnings per share yield of the cap-weighted indices (dominated by large-cap stocks) and subtracts the median EPS yield. You can see in the chart that the wild disparity in 2000, that showed large-cap earnings were being valued too highly, has been totally reversed as of the last 3 years. We now have large-cap earnings producing the highest earnings yield difference since 1982-1985.Of course, we also have a public investor that is scared silly about buying stocks and houses - considered sure things in 2000. But you can't argue the fact that eventually smart money eventually goes where it is treated the best, and the chart above suggests that those long beleaguered large-cap stocks are providing the best value based on historical medians. You can see a pattern evolving similar to that of 1982-1985, as the value disparity hit a peak, and then by 1986, started the opposite pattern.The bottom line is that large-cap stocks have shown a very persistent improving trend of relative strength recently, and with the public investor so paralyzed in today's investment world, we believe (as is normally the case) that it will be the large pools of money that recognize there is no better "safe haven" than US stocks. And because the huge pool of money has to have trading liquidity, that also gives a huge advantage to these large-cap stocks. It has already started.Don Hays
Berk: more and more evidence that the "dumb" money is going to miss out on a generational buying opportunity.
"You can see our Valuation Model continues to scream, just as it has since that 2008-2009 bottom, that you are being offered the BUY OF A LIFETIME in U.S. stocks—now 25.45% undervalued." Hays Advisory
