Here is a joke that I heard from Warren Buffet years back. A very successful oilman dies. He faces Saint Peter, who says, “You’ve been a good man and normally I’d send you to heaven, but heaven is full. We only have a place in hell.” The oilman says, “Any chance I could talk to [...]
Here are slides of my updated/revised presentation on sideways markets. Over the last three months I’ve given talks on sideways markets three times, to CFA Societies in South Florida, New Zealand, and Atlanta. It is very hard to be excited about the US stock market. I read that Rich Bernstein, former chief investment strategist at [...]
Presentation that describes my firm’s investment process. AVI Omaha 2012
I don’t do writing assignments. I don’t like deadlines. I am not a writer; I am an investor who thinks through writing. So when Institutional Investor asked me to write on the future of investing, my instinct was to politely decline. But the topic did seem intriguing. So I decided to give it a try.
Here are my thoughts from the VALUEx Vail conference. The idea for this conference came to me when I attended VALUEx Zurich, organized by Guy Spier and John Mihaljevic in February 2011 (you can register for VALUEx Zurich 2012, here). The thought of spending three days learning and sharing ideas with smart, like-minded value investors [...]
I am back from Buffett’s Omaha. Every year I come back feeling supercharged for the year ahead. This year was no different. From morning till night I had the pleasure of sharing and debating ideas with investors from all over the world. Though I did not plan it this way, the first day I had [...]
In the classic book The Wizard of Oz, the Wizard decreed that everyone who entered the Emerald City wear green-tinted glasses. Visitors and citizens were told that this was to protect them from the “brightness and glory.” In truth, though, the Wizard had lost his mojo and become a run-of-the-mill charlatan. There was no brightness [...]
Though the market keeps raging to the upside, I keep seeing bearish signs in market sentiment – the VIX is hitting multi-year lows, NYSE short interest is hitting a four-year low, the ratio of insider selling to buying is running at what John Hussman calls “panic level,” 8 to 1 (for every share bought eight [...]
One of the biggest hazards of being a professional money manager is that you are expected to behave in a certain way: You have to come to the office every day, work long hours, slog through countless e-mails, be on top of your portfolio (that is, check performance of your securities minute by minute), watch [...]
Everyone is looking with horror at Europe, waiting for the European Economic and Monetary Union to break up and for the PIIGS to start dropping like flies, taking the rest of the euro zone and the global economy with them. Unlikely! European monetary union was a great experiment that made a lot of sense on [...]
I was going to write something smart and pithy about this recent market decline, but then I realized that I’ve written about this in the past (more than once). So here is an excerpt from the Little Book of Sideways Markets. In addition, here is a copy of the presentation about sideways markets. – Enjoy. [...]
Mark Twain said, “To a man with a hammer, everything looks like a nail.” To a Fed – an institution employing an army of economists and academics – everything looks like an economic problem that needs to be quantitatively eased. But the Fed is killing the economy. Undermines confidence Sir Alan Greenspan, who, after he [...]
I have received many emails and a few calls from friends, asking one question: What are the consequences of the downgrade? So I decided to put my thoughts on paper. I break up the consequences into three categories: fundamental (the impact on the economy), emotional (the short-term impact on the market), and political (will it [...]
VALUEx Vail 2011 is over. I already miss these three days. I got the idea to put together VALUEx Vail after I attended VALUEx in Klosters (a little ski resort town in Switzerland, located on the other – the “value” – side of the mountain from Davos) in February this year. Since I live only [...]
While in Omaha attending the Berkshire Hathaway annual meeting I had the pleasure of participating on a Value Investing Panel at Creighton University. Ben Claremon from Inoculated Investor blog took very good notes from the event, you can find them in the PDF below. Creighton Value Investing Panel(function() { var scribd = document.createElement(“script”); scribd.type = “text/javascript”; scribd.async = true; scribd.src = “http://www.scribd.com/javascripts/embed_code/inject.js”; var [...]
Profit margins are a tick away from all-time highs and are creating the impression of cheap equity valuations. But that impression is a mirage, because today’s generous margins are destined to shrink. I first wrote about this in January 2008, and here is an update to that article. All I had to do was to [...]
The Ups and Downs of Flying I am a very nervous flyer. Whenever there is a little bit of turbulence, I look out the window, see shaking wings, and start to wonder whether they’ll keep holding the plane up. Then my rational self kicks in, and I tell myself that statistically it is safer flying [...]
After it’s property bubble burst, Japan embarked on a stimulus program Katsenelson describes simply as: “Lower taxes and borrow money to finance it,” which pretty much sounds like U.S. fiscal policy during the Bush years. Japan’s central bank has also employed quantitative easing repeatedly since the early 2000s; if their experience is any indication, Ben [...]
There is only one difference between a bad economist and a good one: the bad economist confines himself to the visible effect; the good economist takes into account both the effect that can be seen and those effects that must be foreseen. … the bad economist pursues a small present good that will be followed [...]
Updated for 2010 and in time for the holidays, here is the latest installment of my recommended books. I originally wrote this list in 2008 and again last year. I intend to keep adding to and revising it every year. It contains seven sections: Selling, Think Like an Investor, Behavioral Investing, Economics, Stock Market History, [...]
The summer is over in Denver. Of course, in Denver the summer was officially over Labor Day weekend, when the outdoor swimming pools were drained and locked for the winter. For most people summer ended a few weeks later, when the leaves turned bright yellow. But not me, I wanted to hang on to this [...]
I had an interesting conversation last week with a potential investor. I described my thoughts on the US economy, explaining that in our (my firm’s) view the current strength of the US economy is significantly boosted by steroids graciously provided by the US government in the form of stimulus. (I’ve written about it in this [...]
The Chinese economy must be getting out of control, because the Chinese government is doing the unthinkable: It is desperately trying to put the brakes on the economy. When you pump a stimulus package that represents 14% of GDP through a fire hose into an economy, which was already on shaky bubble foundation, in a [...]
The stock market’s performance over the next decade will be very similar to the one since 2000: the WSJ appropriately named it “the lost decade.” Stocks will go up and down (setting all-time highs and multiyear lows), stagnate, and trade in a tight range. At the end of this wild ride, when the excitement subsides [...]
AS THE NEW YEAR OPENS, THE stock market is behaving as if the past 20 years were about to repeat themselves: Another recession will turn into a robust expansion. Stock prices already are discounting an earnings recovery to something only slightly below the level before the financial crisis. Risk-taking is in vogue again. The global [...]
In the bull market that preceded the collapse of Lehman Brothers and the ensuing financial crisis, equity valuations reached some very frothy levels. The correction that followed only lasted until March, since when, the S&P 500 index has risen more than 60 per cent, while the FTSE Eurofirst 300 has gained a similar amount. Vitaliy [...]
Financial commentators are obsessively debating whether the recent rise in the Chinese stock market means there’s a bubble — and if so, when it’s going to burst. My take? Who cares! What happens to the broader Chinese economy is what we should really be watching. It will have a far-reaching impact on the rest of the world — much more far-reaching than a decline in stocks.
Our emotions are our biggest enemy, at least when it comes to investing. We should all know this. If you don’t, stop making your own investment decisions right now. Our emotions lead us to do the opposite of what we should be doing. They lead us to buy high and sell low. They make us [...]