Bogle on Buy-and-Hold Bashers, Recession, and The Bounce

In an interview with the Associated Press, John Bogle says he expects the current recession will last longer than many think, perhaps as long as two years. But despite that prediction, he says critics who have been questioning the sensibility of a buy-and-hold approach are wrong. “They’re wrong to question it,” he says. “Because for all of the last century really, stocks have gone up and down with some frequency. In fact, this is my… Read More

Buffett, Berkshire Navigating Subprime Better than Many

While many have criticized Warren Buffett’s recent Goldman Sachs stock buy (Goldman shares have tumbled since Buffett bought $5 billion in preferred stock on Sept. 23), Bloomberg’s Ari Levy reports that Berkshire Hathaway’s overall financial stock performance has been well ahead of the sector average in recent months. Writes Levy, “Berkshire’s bank-related investments rose 36 percent in the third quarter, while the 84-member Standard & Poor’s 500 Financials Index declined 0.2 percent.” For the past… Read More

Siegel Answers Critics: Yes, Stocks Really Are Cheap

Jeremy Siegel isn’t backing down from his contention that stocks are “dirt cheap”. While his recent comments about the market being undervalued have led to criticism, Siegel writes in Yahoo! Finance today that “Yes, Stocks Are Dirt Cheap”. Using a variety of long-term earnings figures, Siegel presents evidence supporting his view of the market’s current value. “The low level of stocks today is not a result of investors expecting current depressed levels of earnings will… Read More

Icahn: Some Stocks, Senior Debt Offer “Great Opportunity”

Renowned corporate-raider-turned-sharholder-activist Carl Icahn tells Barron’s that there are great buying opportunities in this market, particularly in stocks and senior corporate debt. Icahn talks about the problems with corporate management in America, as well as the stake he has in Yahoo! (he owns around 5.4% of the firm) and his ideas on how to maximize shareholder value. Icahn — who stressed that the market could get worse despite the great values that exist — also… Read More

Buffett to Disclose More on Derivatives; Tilson Ups Berkshire Stake

Warren Buffett says he will give more information on Berkshire Hathaway’s much discussed derivative bets in the company’s end-of-year-report, Reuters is reporting. The derivatives contracts call for the firm to pay out billions to purchasers if, by certain dates starting in 2019, four different market indices fall below agreed-upon levels. Rumors that Berkshire’s liabilities for the contracts could be more than previously thought caused the firm’s stock to plunge — and its credit default swap… Read More

Hulbert: Small-Cap Value Stocks May Be Ripe for Impressive Gains

Small-cap value stocks are risky but they also historically produce jaw-dropping gains at the begining of bull markets, Mark Hulbert writes in the New York Times. Referencing academic research performed by professors Eugene Fama (University of Chicago) and Kenneth French (Dartmouth), Hulbert writes that small-cap value stocks (stocks with the lowest price/book ratios) “gained 17.1 percent, on average, in the first three months following the 13 market bottoms since 1969, equivalent to an annualized rate… Read More

Schwab CIO: Bounce Will Be Big — Don’t Miss It

Jeff Mortimer, chief investment officer of Charles Schwab’s mutual fund division, tells Fortune that the coming turnaround in the stock market will be a big one, and that investors should be building their positions now. Mortimer says that 47 percent of bull market gains usually come in the first 12 months, before many investors have summoned the courage to dive back into the market. Be aware that he doesn’t think we’re out of the woods… Read More

Is Buffett Market Timing?

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

Every Stock Fund In Red for 2008

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

Stocks “Reasonably Cheap” for First Time Since 1980s, Says Grantham

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