Warren Buffett stated in his recent New York Times Op-Ed that he had begun buying U.S. stocks for his personal portfolio, in which he previously held only Treasuries. Does that make him a market timer of sorts? Morningstar’s John Coumarianos offers some interesting thoughts on that question, focusing his answer on the difference between value investors, like Buffett, and market timers or traders. Value investors, like Mr. Buffett and others, look at investing as buying… Read More
A sign of how tough the market has been this year: Through November 24, every long stock fund tracked by Morningstar — that’s right, every single long stock fund — had lost ground in 2008. That includes 10,085 U.S. funds (which, on average, had lost 44.47 percent) and 2,912 international funds (which had lost an average of 51.01 percent). The best U.S. performer: Embarcadero Alternative Strategies, which was down 1.55 percent. That was far better… Read More
Jeremy Grantham, one of the few who saw the current credit crisis coming, provides some thoughtful comments on the crisis, asset bubbles, the stock market’s current valuation and how individual investors might consider looking at the equity markets right now. Speaking with Consuelo Mack on WealthTrack, Grantham (co-founder and chairman of GMO LLC), who has been bearish on the stock market for some time, says that for the first time in over two decades stocks… Read More
In Kiplinger’s Discovering Value column, Whitney Tilson and John Heins say there are two silver linings that have emerged from the market turmoil. The first is that the unprecedented market volatility might be the signal of a stock market bottom, and once that bottom is reached the market could generate some impressive gains. The second positive is that the downturn in the market has created some excellent long-term buying opportunities, and the columnists/money managers like… Read More
Warren Buffett tells Fox Business that he expects American job losses will continue to mount well into next year, and that unemployment will be well above the 6-6.5% range by mid-2009. “It’ll be considerably higher. … I wish it weren’t the case, but there is no way to change a negative feedback cycle like we’re in now in a month or two months.” Echoing the long-term optimism he showed in his much discussed Oct. 17… Read More
Add a new piece of evidence to the notion that most active fund managers fail to beat their benchmark indices over the long haul: According to recently released data from Standard & Poor’s, over the five years ending June 2008, the S&P 500 outperformed 68.6% of actively managed large cap funds; the S&P MidCap 400 outperformed 75.9% of mid-cap funds; and the S&P SmallCap 600 outperformed 77.8% of small cap funds. The data comes from… Read More
No one beats the market all the time — not even the best investors in history — and this difficult bear market has been a perfect example. Yahoo Tech Ticker’s Aaron Task reports that many investors with exceptional long-term track records have (along with just about everyone else) been hit hard. A look at some top money managers’ year-to-date performances: * Warren Buffett (Berkshire Hathaway): -43% * Ken Heebner (CMG Focus Fund) -56% * Harry… Read More
Investment author Jon Markman says in his Nov. 19 “Trader’s Advantage” newsletter that the losses Warren Buffett and Berkshire Hathaway have recently incurred because of the plummeting market may be only the start of their problems. “If you want to talk about problems that are not fully discounted by the market yet, let me just throw one bombshell out there. … What if Berkshire Hathaway, the most respected insurance company in the world, were to… Read More
Robert F. Bruner, dean of the University of Virginia’s Graduate School of Business and author of The Panic of 1907: Lessons Learned from the Market’s Perfect Storm, writes on Forbes.com that the current financial crisis shares a number of attributes with past economic and market crises. But, he asks, “does the recurrence of crises actually mean we’ve learned little from them? More important, what can we learn from them?” Bruner says that the current crisis… Read More
Wall Street Journal columnist Jason Zweig makes the current case for the individual investor, and highlights the vast array of asset classes that are presenting very attractive values. While stocks are cheap, other areas such as corporate and municipal bonds, emerging markets, TIPS, real estate and closed-end funds are also so beaten up that opportunities abound.