Top Manager: Focus on High-Quality Stocks, Repeatable Strategy

Donald Yacktman, whose was Yacktman and Yacktman Focused funds are both in the top 1% of their category for the past one, three, five, and ten years according to Morningstar, says he thinks high-quality stocks are now offering more value than the lower-quality picks that have surged during the rally. Yacktman, a bottom-up stock-picker whose funds have both averaged annual returns of more than 9% over the past 10 years while the S&P 500 has… Read More

Shiller: The Recovery’s in Our Minds, Not Our Metrics

Unemployment, GDP, manufacturing statistics — what’s the best way to tell that we’re headed into an economic recovery? According to Yale economist Robert Shiller, the answer might lie less in the metrics we use to measure economic production than it is in our own minds. In a New York Times column, Shiller says that supposedly key economic indicators like unemployment or retail sales figures aren’t causes of a recovery, but symptoms of one. “For a… Read More

The Diversification Debate

In addition to the question of how many stocks they should own, another similar question many investors ask is how many funds or asset classes they should own. In a recent Financial Times column, David Stevenson offers some interesting data on the topic, as well as some comments from top strategists. The “proper answer” to those questions, Stevenson says, is to follow the modern portfolio theory developed by Harry Markowitz, which “suggests that you look… Read More

Paulson on Financial Buying Binge

After profiting hugely from shorting financial stocks last year as the sector tanked, hedge fund guru John Paulson has been buying up beaten-down financials this summer. Paulson has bought a stake of about 2% in Citigroup, the New York Post reports, citing sources. “One source said that Paulson sees Citi’s shares trading closer to its book value of $5 to $7 a share, and that he has been scooping up shares in the bank over… Read More

Beating the Timing Temptation

As Liz Ann Sonders notes in the posting below, a lot of investors are now wondering whether it’s too late to jump into the market, or, for those who have been in the market during the rally, whether it’s time to cash out. As Sonders says, such all or nothing decisions are very dangerous — and The Stingy Investor’s Norm Rothery has laid out some excellent reasons why. In an article titled “Tempting Temptation” (originally… Read More

Sonders Says We’re in “Coiled Spring” Recovery, Warns Against All or Nothing Bets

Charles Schwab Chief Investment Strategist Liz Ann Sonders tells Fox Business Network that she thinks we’re in the early stages of a “coiled spring” recovery, and says that too many investors are trying to make all-or-nothing calls as they ponder whether to get back into the market right now. Sonders, who correctly called the start of the recession, says there’s a risk that what we’re seeing now is a “sugar high”. But, she adds, “I… Read More

Guru Strategy Rating Changes: Dish Network, Under Armour Rising

Each week, I take a look at which stocks my Guru Strategy computer models have newfound interest in, and which they have soured on. Here’s a look at some of the stocks that my strategies have upgraded or downgraded today. Among the bigger names on the move: athletic apparel maker Under Armour and gaming company Electronic Arts.

They Got It Right in March; What Do They Say Now?

A few weeks ago, we highlighted how Jeremy Grantham — who quite presciently had advised investors to “reinvest when terrified” back in March — is now sounding much more cautious. And, according to The Wall Street Journal, Grantham isn’t the only strategist who correctly called the market’s upturn but is now feeling less optimistic. “In March, analysts who picked the bottom were a lonely lot,” writes the Journal’s Mark Gongloff. Now, he says, several of… Read More

Berkowitz: “Great Environment” for Stock-Pickers

Top fund manager Bruce Berkowitz, whose Fairholme Fund has earned about 12% per annum over its 10-year history while the S&P 500 has lost about 3% annualized, says that this is a “great environment for an investor, for a value-based stock picker, security picker”, and that he’s continuing to see a number of bargains in the market even after its recent rise. Berkowitz, who is something of a contrarian, tells Steve Forbes that his fund… Read More

M.I.T. Hedge Fund Guru Shares His Secrets

In an interview with WealthTrack’s Consuelo Mack, hedge fund manager, author, and M.I.T. professor Andrew Lo says that the financial crisis has shown that a new type of diversification is needed, that buy-and-hold investing is an incomplete approach, and that using a long-only approach puts individual investors at a significant disadvantage. Lo, who also heads M.I.T.’s laboratory for financial engineering, says buy-and-hold investing is “not necessarily wrong, but it’s incomplete.” Back in 1970s and 80s… Read More