Why You Can Be Good — But Probably Not Great

Todd Sullivan often posts some great speeches or client letters from successful investors on his ValuePlays web site, and he recently featured a particularly interesting speech that former hedge fund star Mark Sellers gave to Harvard Business School students. In the speech, Sellers tells these top students that they “have almost no chance of being a great investor”, the type who can compound money at 20%+ a year for the long run. “You have a… Read More

The “Expert on Experts” on Who You Can — And Can’t — Trust in Today’s Market

“Expert”. It’s a term that gets thrown around an awful lot in parts of our society, and the financial world is no exception. But in an interview with Money magazine, researcher Philip Tetlock warns not to trust someone just because they’re called an expert, and explains why so many of these supposed “experts” failed to see the market crash and economic crisis coming.

A Little Consistency, Please

Earnings: It’s been a dirty word for the past several months, as companies across the country have been posting some ugly results and slashing estimates of future earnings. Standard & Poor’s is now projecting $54.70 in 2009 operating earnings per share for the S&P 500, and just $41.88 per share in as-reported earnings for the index’s components. By comparison, as recently as 2007, operating earnings for the S&P 500 were $82.54 per share, and as-reported… Read More

Kass Turning Bullish?

It appears that Doug Kass — the money manager and RealMoney.com columnist who has been particularly bearish in recent years and predicted some of the economic crisis — is turning a bit bullish. On his RealMoney blog, Kass says he sees “tentative signs, but positive signs nonetheless,” for the stock market. “On multiple fronts, equities appear to have incorporated the bad news and are undervalued both absolutely and relative to fixed income.” Kass says that… Read More

Buffett Cut J&J Stake, Other Holdings in Fourth Quarter

Berkshire Hathaway has released the list of its holdings for the fourth quarter of 2008 — and it looks like Warren Buffett has made some substantial changes to his company’s portfolio. While Buffett has recently said he is “buying American” with his personal portfolio, the biggest news from Berkshire’s filing doesn’t involve new purchases, notes Alex Crippen of CNBC’s Warren Buffett Watch, “Instead of asking what Buffett has been buying,” Crippen says, “we should have… Read More

Hulbert: Signs of Investors Moving Back Toward Risk

In his latest column for MarketWatch, Mark Hulbert notes that a “dramatic reversal” is taking place in the bond market — and says it’s a reversal that could signal good things for the economy and the stock market. The yield spread between 10-year U.S. Treasuries and 10-year triple-A-rated municipal bonds has fallen significantly in the past month, Hulbert says. A month ago, those Treasuries were yielding 2.3% versus 3.53% for the munis. Given that interest… Read More

Grantham: There’s Risk in Value — and in Buy-and-Hold

Jeremy Grantham has released the second half of his fourth-quarter 2008 letter on GMO’s website, and in it he offers several intriguing points about why value investors got hit hard in 2008, where the economy is headed, and whether a buy-and-hold approach to stock investing makes sense. Calling 2008 “The Year of The Value Trap”, Grantham notes that the decades-long pattern of big market declines leading to great stock bargains and big recoveries did not… Read More

Growth vs. Value: Does It Matter Anymore?

Growth versus value: For decades, it has been perhaps the most widely asked question in stock market strategy discussions. But in Forbes’ most recent Intelligent Investing Panel, two top strategists argue that the growth/value debate is no longer the critical question it once was. Robert Froehlich, chief investment strategist for DWS Investments at Deutsche Bank, says that growth and value flat-out don’t matter anymore. Globalization, he says, has caused markets to become interdependent, which speeds… Read More

Tilson on Cognitive Dissonance, and a Shift in Strategy

In a column for the Financial Times, money manager and columnist Whitney Tilson — one of those who predicted the housing and financial crises — discusses the “tricky” process of trying to alter one’s approach based on the lessons of the past year, and examines some changes that he and another star manager have made. Tilson say that many investors are likely enduring some serious cognitive dissonance — that is, they are having trouble reconciling… Read More

Schiff: Any Stimulus Plan Will Be Disastrous

While investors are eagerly waiting to hear what the final economic stimulus package will include, author Peter Schiff, who predicted the recent housing and stock market collapses, has been issuing dire warnings about whatever version of the plan is approved In an interview with Yahoo! TechTicker’s Aaron Task, Schiff says passage of the stimulus plan will do “the exact opposite of what President Obama is saying,” referring to Obama’s statements about disaster following if the… Read More