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.
Fortune’s Shawn Tully recently looked at the Shiller P/E model (developed by Yale University professor Robert Shiller), which calculates the P/E ratio of the market using ten years worth of earnings (vs. just the earnings of the last 12 months). Currently, the market P/E based on the Shiller model is around 15, which is lower than it’s been in 20 years. The bottom line is the lower the P/E is when you invest the higher… Read More
Validea Newsleter – Nov. 14, 2008. The economic news is still bad, with unemployment up, retail sales down, and manufacturing activity very weak. Still, despite all the negativity, things haven’t yet gotten as bad as they were during past major downturns, such as 1973-74 and 1982-83. On the bright side, the LIBOR has been dropping, though banks still aren’t doing a whole lot of lending to each other. And the Treasury Department is now backtracking… Read More
Three well respected investment minds – David Winters of the Wintergreen Fund, Rob Arnott of Research Affiliates & Robert Kessler of The Kessler Companies – share their outlooks and thoughts on Consuelo Mack’s WealthTrack. Winters thinks we’re seeing the most attractive values of his lifetime, while Arnott says stocks look the cheapest they’ve been in years.
Berkshire Hathaway’s latest quarterly filing reveals that Buffett has added to his stake in oil producer ConocoPhillips and bought shares of the manufacturer Eaton Corp. He reduced his holdings in Bank of America Corp. Berkshire is now ConocoPhillips largest shareholder. According to a 2007 academic study by Gerald Martin of American University and John Puthenpurackal of University of Nevada, if an investor would have followed Berkshire’s purchases, even with the delayed notice, they would have… Read More
In an interview with Advisor Perspectives, Siegel says he “may be the lone optimist in this market.” The noted investment author and commentator argues that the current market P/E is a mere 10.7 and that investors could see stocks return 20% over the next 12 months, although he sees a very difficult fourth quarter and a tough first quarter for the overall economy. Siegel’s putting his money where his mouth is though, and has his… Read More