Simple words of advice. While it might be tempting to play where all the action is, we've always done well by standing on the curb and watching the craziness whiz by. Investors are piling into long-term bonds, which makes sense only if one believes that inflation has been whipped once and for all and for all time. Sure, inflation is zero (or less) at the moment, and it might stay ...

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Accomplishing something without help can be very satisfing, but sometimes the best decision can be to hire a guide. I’m like many other do-it yourselfers and believe I can accomplish most tasks on my own or with minimal help. With age and experience I have learned to stand back and take a second look. My wife would be the first to tell you I certainly am not capable of accomplishing all home improvement ...

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Jul
20

We hit the "print" button on our quarterly commentary early last week (about July 12). A day or two later, we received Jeremy Grantham's quarterly commentary. Grantham's commentary goes to a client base worth tens of billions of dollars, while ours goes to a more earthly total dollar valuation. Nonetheless, it was refreshing to see that our view of the world is substantially in line with one of the globe's ...

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Jun
24

Worriers and Dreamers How can emerging market debt play a role in my porfolio? We spend a great deal of time conducting Meta analysis (reading respected third party researchers). One of the luminaries I enjoy following is Howard Marks. He consistently boils very complex material down into a readable format. In some of his more recent commentary he referenced the two basic camps of investing, Dreamers and Worriers. Dreamers are important for the markets, ...

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We are value investors. That means we tactically look for the chance to buy investments when we think they are cheaper than their true inherent value. It also means that we need to ready to act because whole asset classes can move from expensive to cheap and back again in a matter of weeks.Our outlook over the next 5-7 years is for lower than average GDP growth and a slow ...

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On Friday 4/30 the Commerce Dept. (more specifically, the Bureau of Economic Analysis, or BEA) released its first estimates of economic activity for the first quarter. The headline number was that GDP grew in the first quarter at an annual rate of 3.2%. OK...that's a number, but what does it mean? First, you need to ask whether that is a figure that adjusts for inflation or not. News accounts didn't make the ...

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Corporate earnings have fully recovered back to long-term trendlines, and stock prices have pushed right on through fair value. Any movement upward from here is getting into "exuberant" territory. Regular readers (and clients) know that we are underweight to equities at the moment. Meaning that, if a family has a long-term objective of 60% stocks, we only have about half that exposure to stocks and stock-like assets. We made this tactical ...

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We commonly think of three possible actions that we can take with our investments – Buy, Sell or Hold. One of these three is always the wrong choice. Can you tell which one? For more than a generation, Wall Street analysts have issued reports on stocks. These reports are generally accompanied by a recommendation to Buy, Sell or Hold the stock. Many analysts further break these three categories into finer gradations ...

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Stocks are plummeting. What to do? That's not the right question...the right question is, "In past eras, what have stock returns looked like in the five years following prices like these?" We calculate the P/E ratio on stocks using Robert Shiller's method: Take the last 10 years of reported earnings on the S&P500; adjust for inflation; average those numbers. That produces a quite reliable figure for future earnings expectations -- the ...

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