And the 30 year T Bond Yield; we are waiting for a break in the trendline.
13 January 2010
Shorting the Treasury Index
ProShares UltraShort Lehman 20+ Year Treasury ETF (TBT). We have a resistance line diagonally from left top sloping downwards crossing a support from late 2009 - currently. We are at a crossroads.
And the 30 year T Bond Yield; we are waiting for a break in the trendline.
Head and Shoulders. At a pullback from a break above the neckline just above 5% we'll start building a short position.
And the 30 year T Bond Yield; we are waiting for a break in the trendline.
Tanzanian Royalty P&F Chart Analysis
TRE is hitting a downward trendline (the downward sloping red line from lift top to right lower above the columns)
We have a bullish alert column (XXX column at the right, because the bottom X is higher then the bottom of the next XXX column to the left)
We now check the next bearish alert column of O's (the 3 OOO between the nr 6 and 9) to the left and move right from here to find the next bullish alert column.
It is the same column we started out with (often the case)
This gives us our price objective: 4.25 (top box of the column) minus 3.25 (box below the column) times 3 (reversal amount for the chart)
That makes 3 plus 3.25 (bottom box nr) is 6.25.
Which is incidentally where the longer term downward trendline from the high in 2006 (10.50) to the top in beginning of 2009 (7.0) comes in play.
Notice my price objective is 25 cents lower then the charts. I like a margin of safety and I like to do the handy work myself.
Now let us expand on that:
If we have a bearish reversal at 6.25 it should go to 6.25 - ((2/3 of )6.25 minus 3.5)) makes 4.50.
The price objective from there is 4 - 2.25 times 3 = 5.25 plus 4.50 makes 9.75.
Allowing for my margin of safety to start with, well then be at the all time high.
I wont be trading before we are post 20 dollars. Trading is like work.
Smiley.
We have a bullish alert column (XXX column at the right, because the bottom X is higher then the bottom of the next XXX column to the left)
We now check the next bearish alert column of O's (the 3 OOO between the nr 6 and 9) to the left and move right from here to find the next bullish alert column.
It is the same column we started out with (often the case)
This gives us our price objective: 4.25 (top box of the column) minus 3.25 (box below the column) times 3 (reversal amount for the chart)
That makes 3 plus 3.25 (bottom box nr) is 6.25.
Which is incidentally where the longer term downward trendline from the high in 2006 (10.50) to the top in beginning of 2009 (7.0) comes in play.
Notice my price objective is 25 cents lower then the charts. I like a margin of safety and I like to do the handy work myself.
Now let us expand on that:
If we have a bearish reversal at 6.25 it should go to 6.25 - ((2/3 of )6.25 minus 3.5)) makes 4.50.
The price objective from there is 4 - 2.25 times 3 = 5.25 plus 4.50 makes 9.75.
Allowing for my margin of safety to start with, well then be at the all time high.
I wont be trading before we are post 20 dollars. Trading is like work.
Smiley.
The Mini Ice Age Starts Here
The bitter winter afflicting much of the Northern Hemisphere is only the start of a global trend towards cooler weather that is likely to last for 20 or 30 years, say some of the world’s most eminent climate scientists.
Their predictions – based on an analysis of natural cycles in water temperatures in the Pacific and Atlantic oceans – challenge some of the global warming orthodoxy’s most deeply cherished beliefs, such as the claim that the North Pole will be free of ice in summer by 2013.
According to the US National Snow and Ice Data Centre in Colorado, Arctic summer sea ice has increased by 409,000 square miles, or 26 per cent, since 2007 – and even the most committed global warming activists do not dispute this.
Their predictions – based on an analysis of natural cycles in water temperatures in the Pacific and Atlantic oceans – challenge some of the global warming orthodoxy’s most deeply cherished beliefs, such as the claim that the North Pole will be free of ice in summer by 2013.
According to the US National Snow and Ice Data Centre in Colorado, Arctic summer sea ice has increased by 409,000 square miles, or 26 per cent, since 2007 – and even the most committed global warming activists do not dispute this.
Evaluating Gold Juniors - Jim Sinclairs Criteria
Management ethics, found out by checking litigation, criminal and credit records. All this information is now easily attainable.
Cease Trade Orders or Bankruptcies
Penalties or Sanctions
A property or properties with outstanding upside promise sustained supporting data.
History of success both on the ground (properties to mines) and in the financial markets (stock performances of at least 10 to 1 value).
Cease Trade Orders or Bankruptcies
Penalties or Sanctions
A property or properties with outstanding upside promise sustained supporting data.
History of success both on the ground (properties to mines) and in the financial markets (stock performances of at least 10 to 1 value).
Market Timing 2010 - 2013
http://www.trendsman.com/
Stocks have recovered too far and too fast for the super-bearish scenario. A market needs a distribution period before a huge fall. The distribution period was the 2007-2008 head and shoulders top. Also, since we are 10 years into a bear market, who exactly is left to sell? People were wiped out in the tech bubble, the housing bubble and in the recent huge decline in stocks. Since we are in a secular bear market (and most would agree) stocks are unlikely to make new highs anytime soon.
Interestingly, there is a secular bear market template that can help us project 2010 and the few years after. We are in the fourth secular bull market since the 1890s. The current bear market is following the exact path of the last three. The crash of 2008 happened in 1974, 1938 and 1907. The huge rebound of 2009 happened in 1975, 1938, and 1908. The structure and size of these three massive rebounds is a key point for 2010 as we project the future of the current rebound.
Stocks have recovered too far and too fast for the super-bearish scenario. A market needs a distribution period before a huge fall. The distribution period was the 2007-2008 head and shoulders top. Also, since we are 10 years into a bear market, who exactly is left to sell? People were wiped out in the tech bubble, the housing bubble and in the recent huge decline in stocks. Since we are in a secular bear market (and most would agree) stocks are unlikely to make new highs anytime soon.
Interestingly, there is a secular bear market template that can help us project 2010 and the few years after. We are in the fourth secular bull market since the 1890s. The current bear market is following the exact path of the last three. The crash of 2008 happened in 1974, 1938 and 1907. The huge rebound of 2009 happened in 1975, 1938, and 1908. The structure and size of these three massive rebounds is a key point for 2010 as we project the future of the current rebound.
12 January 2010
Anthony Bolton
Anthony Bolton (born 7 March 1950) is one of the UK's best known investment fund managers and most successful investors, having managed the Fidelity Special Situations fund from December 1979 to December 2007. Over this 28-year period the fund achieved annualised growth of 19.5%, far in excess of the 13.5% growth of the wider stock exchange, turning a £1,000 investment into £147,000.
Bolton emphasizes some key fundamentals. “Cash-on-cash return is the ultimate measure of attractiveness in terms of valuation,” he writes. This metric shows how much cash a company generates on cash invested. Cash is not the same as profit. “Cash is a fact, profit is an opinion,” goes the old Wall Street adage. That’s why most great investors follow the cash, not earnings. (Too often, reported earnings are merely an accounting fiction).
Bolton also looks for strong balance sheets. That means lots of cash and little debt. “When something goes wrong at a company with a weak balance sheet, this is when equity investors lose the most,” writes Bolton.
Bolton emphasizes some key fundamentals. “Cash-on-cash return is the ultimate measure of attractiveness in terms of valuation,” he writes. This metric shows how much cash a company generates on cash invested. Cash is not the same as profit. “Cash is a fact, profit is an opinion,” goes the old Wall Street adage. That’s why most great investors follow the cash, not earnings. (Too often, reported earnings are merely an accounting fiction).
Bolton also looks for strong balance sheets. That means lots of cash and little debt. “When something goes wrong at a company with a weak balance sheet, this is when equity investors lose the most,” writes Bolton.
10 January 2010
Jim Slater
No official position. Slater manages his own money through a private company.
Investment style
Flexible, but he is best known as for his interest in stocks that offer growth-at-a-reasonable-price (GARP).
Investment style
Flexible, but he is best known as for his interest in stocks that offer growth-at-a-reasonable-price (GARP).
Evaluating Gold Juniors - Daniel Duval
Evaluating Gold Juniors: Are You Missing the Big Picture?
By: David Duval Post Edited: April 25, 2009 (http://www.jsmineset.com/)
Evaluating the merits and future prospects for a junior exploration company is a highly subjective process. Intangibles such as political risk, financial risk, market risk, commodity risk, technical risk and a host of other variables confront companies across the entire minerals industry spectrum. Nonetheless, no matter what the relative size of the company or the commodities segment it’s actively involved in, the best place to start your evaluation is with management.
This is especially true for junior gold explorers, the segment of the minerals industry that accounts for the largest proportion of global exploration expenditures and, predictably, the vast majority of new gold discoveries.
By: David Duval Post Edited: April 25, 2009 (http://www.jsmineset.com/)
Evaluating the merits and future prospects for a junior exploration company is a highly subjective process. Intangibles such as political risk, financial risk, market risk, commodity risk, technical risk and a host of other variables confront companies across the entire minerals industry spectrum. Nonetheless, no matter what the relative size of the company or the commodities segment it’s actively involved in, the best place to start your evaluation is with management.
This is especially true for junior gold explorers, the segment of the minerals industry that accounts for the largest proportion of global exploration expenditures and, predictably, the vast majority of new gold discoveries.
James D. Slater
Born: U.K., in 1929
Affiliations:
•Leyland Motor Corporation
•Slater Walker Securities
•BioProjects International PLC
•Galahad Gold PLC
Most Famous For: The author of an investment column in London's The Sunday Telegraph under the pen name of "The Capitalist," which became a forum for publicizing his personal stock investment methodology. His strategies were one of the first to be made widely available to the investing public in the U.K.
Jim Slater is credited with inventing the price-earnings to earnings-growth ratio (PEG) and popularizing its use in America through his book, "The Zulu Principle" (1992). (To learn more, read Move Over P/E, Make Way For The PEG and How The PEG Ratio Can Help Investors.)
Affiliations:
•Leyland Motor Corporation
•Slater Walker Securities
•BioProjects International PLC
•Galahad Gold PLC
Most Famous For: The author of an investment column in London's The Sunday Telegraph under the pen name of "The Capitalist," which became a forum for publicizing his personal stock investment methodology. His strategies were one of the first to be made widely available to the investing public in the U.K.
Jim Slater is credited with inventing the price-earnings to earnings-growth ratio (PEG) and popularizing its use in America through his book, "The Zulu Principle" (1992). (To learn more, read Move Over P/E, Make Way For The PEG and How The PEG Ratio Can Help Investors.)
George Soros
Born: Budapest, Hungary, in 1930
Affiliations:
•F.M. Mayer
•Wertheim & Company
•Arnhold & S. Bleichroeder
•Soros Fund Management
Investment Style
George Soros was a master at translating broad-brush economic trends into highly leveraged, killer plays in bonds and currencies. As an investor, Soros was a short-term speculator, making huge bets on the directions of financial markets. He believed that financial markets can best be described as chaotic. The prices of securities and currencies depend on human beings, or the traders - both professional and non-professional - who buy and sell these assets. These persons often act out based on emotion, rather than logical considerations. (For more insight, see Understanding Investor Behavior.)
He also believed that market participants influenced one another and moved in herds. He said that most of the time he moved with the herd, but always watched for an opportunity to get out in front and "make a killing." How could he tell when the time was right? Soros has said that he would have an instinctive physical reaction about when to buy and sell, making is strategy a difficult model to emulate.
Affiliations:
•F.M. Mayer
•Wertheim & Company
•Arnhold & S. Bleichroeder
•Soros Fund Management
Investment Style
George Soros was a master at translating broad-brush economic trends into highly leveraged, killer plays in bonds and currencies. As an investor, Soros was a short-term speculator, making huge bets on the directions of financial markets. He believed that financial markets can best be described as chaotic. The prices of securities and currencies depend on human beings, or the traders - both professional and non-professional - who buy and sell these assets. These persons often act out based on emotion, rather than logical considerations. (For more insight, see Understanding Investor Behavior.)
He also believed that market participants influenced one another and moved in herds. He said that most of the time he moved with the herd, but always watched for an opportunity to get out in front and "make a killing." How could he tell when the time was right? Soros has said that he would have an instinctive physical reaction about when to buy and sell, making is strategy a difficult model to emulate.
William (Bill) H. Gross
Born: Middletown, Ohio, in 1944
Affiliations:
•Pacific Mutual Life Insurance Company
•Pacific Investment Management Company (PIMCO)
Investment Style
In an October, 2005, commentary piece, MarketThoughts.com editor, Henry K. To wrote that Bill Gross "believes that successful investment in the long-run (whether in bonds or equities) rests on two foundations: the ability to formulate and articulate a secular [long-term] outlook and having the correct structural composition within one's portfolio over time."
Gross describes these foundations as having a three- to five-year forecast that forces an investor to think long term and to avoid the destructive "emotional whipsaws of fear and greed." He clearly states that "such emotions can convince any investor or management firm to do exactly the wrong thing during irrational periods in the market."
Secondly, he argues that "those who fail to recognize the structural elements of the investment equation [asset allocation, diversification, risk-return measurements and investing costs] will leave far more chips on the table for other more astute investors to scoop up than they could ever imagine."
Affiliations:
•Pacific Mutual Life Insurance Company
•Pacific Investment Management Company (PIMCO)
Investment Style
In an October, 2005, commentary piece, MarketThoughts.com editor, Henry K. To wrote that Bill Gross "believes that successful investment in the long-run (whether in bonds or equities) rests on two foundations: the ability to formulate and articulate a secular [long-term] outlook and having the correct structural composition within one's portfolio over time."
Gross describes these foundations as having a three- to five-year forecast that forces an investor to think long term and to avoid the destructive "emotional whipsaws of fear and greed." He clearly states that "such emotions can convince any investor or management firm to do exactly the wrong thing during irrational periods in the market."
Secondly, he argues that "those who fail to recognize the structural elements of the investment equation [asset allocation, diversification, risk-return measurements and investing costs] will leave far more chips on the table for other more astute investors to scoop up than they could ever imagine."
Michael Steinhardt
Born: Mount Kisco, New York, in 1941
Affiliations:
•Calvin Bullock
•Loab Rhoades & Co
•Steinhardt Partners
Most Famous For: Steinhardt Partners achieved a performance track record that still stands out on Wall Street: 24% compound average annual returns – more than double the S&P 500 – over a 28-year period. What's more amazing is that Steinhardt accomplished this record with stocks, bonds, long and short options, currencies and time horizons ranging from 30 minutes to 30 days. There were few investment instruments over which Michael Steinhardt did not wield some mastery.
Investment Style
Steinhardt had a long-term investor's perspective but, for the most part, invested as a short-term strategic trader. He bet on directional moves using an eclectic mix of securities and was backed up by a team of traders and analysts. As mentioned above, he emphasized macro asset allocation type moves from which he harvested his gains. Charles Kirk, publisher of The Kirk Report, gleaned these "rules of investing" from a Steinhardt speech back in June, 2004, which show that even a high-flying hedge fund investor needs to be grounded:
•Make all your mistakes early in life. The more tough lessons early on, the fewererrors you make later.
•Always make your living doing something you enjoy.
•Be intellectually competitive. The key to research is to assimilate as much data aspossible in order to be to the first to sense a major change.
•Make good decisions even with incomplete information. You will never have all the information you need. What matters is what you do with the information you have.
•Always trust your intuition, which resembles a hidden supercomputer in the mind. It can help you do the right thing at the right time if you give it a chance.
•Don't make small investments. If you're going to put money at risk, make sure the reward is high enough to justify the time and effort you put into the investment decision.
Affiliations:
•Calvin Bullock
•Loab Rhoades & Co
•Steinhardt Partners
Most Famous For: Steinhardt Partners achieved a performance track record that still stands out on Wall Street: 24% compound average annual returns – more than double the S&P 500 – over a 28-year period. What's more amazing is that Steinhardt accomplished this record with stocks, bonds, long and short options, currencies and time horizons ranging from 30 minutes to 30 days. There were few investment instruments over which Michael Steinhardt did not wield some mastery.
Investment Style
Steinhardt had a long-term investor's perspective but, for the most part, invested as a short-term strategic trader. He bet on directional moves using an eclectic mix of securities and was backed up by a team of traders and analysts. As mentioned above, he emphasized macro asset allocation type moves from which he harvested his gains. Charles Kirk, publisher of The Kirk Report, gleaned these "rules of investing" from a Steinhardt speech back in June, 2004, which show that even a high-flying hedge fund investor needs to be grounded:
•Make all your mistakes early in life. The more tough lessons early on, the fewererrors you make later.
•Always make your living doing something you enjoy.
•Be intellectually competitive. The key to research is to assimilate as much data aspossible in order to be to the first to sense a major change.
•Make good decisions even with incomplete information. You will never have all the information you need. What matters is what you do with the information you have.
•Always trust your intuition, which resembles a hidden supercomputer in the mind. It can help you do the right thing at the right time if you give it a chance.
•Don't make small investments. If you're going to put money at risk, make sure the reward is high enough to justify the time and effort you put into the investment decision.
John (Jack) Bogle
Born: Montclair, New Jersey, in 1929
Affiliations:
•Wellington Management Company
•Vanguard Group, Inc.
•Vanguard Group's Bogle Financial Markets Research Center.
Most Famous For: Bogle founded the Vanguard Group mutual fund company in 1974 and made it into one of the world's largest and most respected fund sponsors. Bogle pioneered the no-load mutual fund and championed low-cost index investing for millions of investors. He created and introduced the first index fund, Vanguard 500, in 1976. In 1999, Fortune Magazine named Bogle one of the four "investment giants" of the twentieth century. (For related reading, see Index Investing and The Lowdown On Index Funds.)
Investment Style
In simple terms, Jack Bogle's investing philosophy advocates capturing market returns by investing in broad-based index mutual funds that are characterized as no-load, low-cost, low-turnover and passively managed. He has consistently recommended that individual investors focus on the following themes:
•The primacy of investing simplicity
•Minimizing investment-related costs and expenses
•The productive economics of a long-term investment horizon
•A reliance on rational analysis and an avoidance of emotions in the investment decision-making process
•The universality of index investing as an appropriate strategy for individual investors
Affiliations:
•Wellington Management Company
•Vanguard Group, Inc.
•Vanguard Group's Bogle Financial Markets Research Center.
Most Famous For: Bogle founded the Vanguard Group mutual fund company in 1974 and made it into one of the world's largest and most respected fund sponsors. Bogle pioneered the no-load mutual fund and championed low-cost index investing for millions of investors. He created and introduced the first index fund, Vanguard 500, in 1976. In 1999, Fortune Magazine named Bogle one of the four "investment giants" of the twentieth century. (For related reading, see Index Investing and The Lowdown On Index Funds.)
Investment Style
In simple terms, Jack Bogle's investing philosophy advocates capturing market returns by investing in broad-based index mutual funds that are characterized as no-load, low-cost, low-turnover and passively managed. He has consistently recommended that individual investors focus on the following themes:
•The primacy of investing simplicity
•Minimizing investment-related costs and expenses
•The productive economics of a long-term investment horizon
•A reliance on rational analysis and an avoidance of emotions in the investment decision-making process
•The universality of index investing as an appropriate strategy for individual investors
Jesse Livermore
Born: South Acton, Massachusetts, in 1877; Died in 1940
Affiliations: Individual investor
Most Famous For: Jesse Livermore was a highly visible stock trader and speculator for almost fifty years. He was famous for making and losing several multimillion dollar fortunes during his professional career.
Investment Style
Jesse Livermore had no formal education or stock trading experience. He was a self-made man who learned from his winners as well as his losers. It was these successes and failures that helped cement trading ideas that can still be found throughout the market today. Some of the major principles that he employed include:
•Money is not made in day trading on price fluctuations. Livermore emphasized the importance of focusing on markets as a whole, rather than on individual stocks. He noted that greater success comes from determining the direction of the overall market than attempting to pick the direction of an individual stock without concern for market direction.
•Adopt a buy-and-hold strategy in a bull market and sell when it loses momentum. Livermore always had an exit strategy in place. (To learn more, see A Look At Exit Strategies.)
•Study the fundamentals of a company, the market and the economy. Livermore separated successful investors from unsuccessful investors by the level of effort they put into investing.
•Investors who focus on the short term eventually lose their capital.
•Ignore insider information; make your own independent analysis. Livermore was very careful about where he got his information and recommended using multiple sources. (For more insight, see Can Insiders Help You Make Better Trades? and When Insiders Buy, Should Investors Join Them?)
•Embrace change in adapting investing strategies to evolving market conditions.
Affiliations: Individual investor
Most Famous For: Jesse Livermore was a highly visible stock trader and speculator for almost fifty years. He was famous for making and losing several multimillion dollar fortunes during his professional career.
Investment Style
Jesse Livermore had no formal education or stock trading experience. He was a self-made man who learned from his winners as well as his losers. It was these successes and failures that helped cement trading ideas that can still be found throughout the market today. Some of the major principles that he employed include:
•Money is not made in day trading on price fluctuations. Livermore emphasized the importance of focusing on markets as a whole, rather than on individual stocks. He noted that greater success comes from determining the direction of the overall market than attempting to pick the direction of an individual stock without concern for market direction.
•Adopt a buy-and-hold strategy in a bull market and sell when it loses momentum. Livermore always had an exit strategy in place. (To learn more, see A Look At Exit Strategies.)
•Study the fundamentals of a company, the market and the economy. Livermore separated successful investors from unsuccessful investors by the level of effort they put into investing.
•Investors who focus on the short term eventually lose their capital.
•Ignore insider information; make your own independent analysis. Livermore was very careful about where he got his information and recommended using multiple sources. (For more insight, see Can Insiders Help You Make Better Trades? and When Insiders Buy, Should Investors Join Them?)
•Embrace change in adapting investing strategies to evolving market conditions.
Julian Robertson
Born: Salisbury, North Carolina, in 1933
Affiliations:
•Kidder Peabody
•Webster Management Corporation
•Tiger Management Group (TMG)
Most Famous For: Robertson had the best hedge fund record throughout the 1980s and 1990s. It is reported that the compound rate of return to his investors was 32%. During his active years, he was considered to be the "Wizard of Wall Street." His hedge fund, Tiger Management, became the world's largest fund, which peaked at over $23 billion invested. (For related reading, see A Brief History Of The Hedge Fund.)
Investment Style
Realistically speaking, there is very little the average investor can use with regard to Robertson's approach to investing. It was highly personal. In TMG, Robertson would get input from his analysts and make all the investment decisions.
It is said that Robertson was a macro trader, and often rode worldwide trends. He argued against using fundamentals, a position that well might have led to the poor performance and liquidation of his Tiger funds in 2000.
His investment style, about which there is very little written, consisted of a "smart idea, grounded on exhaustive research, followed by a big bet." Not exactly a practical framework that would work for the general investing public.
Robertson's highly individualized approach served him well for a time, but when the end came, it was abrupt - a not unfamiliar phenomenon in the world of hedge fund investing. (For related reading, check out Losing The Amaranth Gamble.)
Affiliations:
•Kidder Peabody
•Webster Management Corporation
•Tiger Management Group (TMG)
Most Famous For: Robertson had the best hedge fund record throughout the 1980s and 1990s. It is reported that the compound rate of return to his investors was 32%. During his active years, he was considered to be the "Wizard of Wall Street." His hedge fund, Tiger Management, became the world's largest fund, which peaked at over $23 billion invested. (For related reading, see A Brief History Of The Hedge Fund.)
Investment Style
Realistically speaking, there is very little the average investor can use with regard to Robertson's approach to investing. It was highly personal. In TMG, Robertson would get input from his analysts and make all the investment decisions.
It is said that Robertson was a macro trader, and often rode worldwide trends. He argued against using fundamentals, a position that well might have led to the poor performance and liquidation of his Tiger funds in 2000.
His investment style, about which there is very little written, consisted of a "smart idea, grounded on exhaustive research, followed by a big bet." Not exactly a practical framework that would work for the general investing public.
Robertson's highly individualized approach served him well for a time, but when the end came, it was abrupt - a not unfamiliar phenomenon in the world of hedge fund investing. (For related reading, check out Losing The Amaranth Gamble.)
David Dreman
Born: Winnipeg, Manitoba, Canada in 1936
Affiliations:
•Rauscher Pierce Refsnes Securities Corp.
•J&W Seligman
•Value Line Investment Service
•The Journal of Psychology and Financial Markets
•International Foundation for Research in Experimental Economics (IFREE)
•Dreman Value Management, L.L.C
Investment Style
David Dreman's name is synonymous with contrarian value investing strategies. His first book, "Contrarian Investment Strategy: The Psychology of Stock Market Success" (1980) is an investment classic. He has authored numerous scholarly investment articles in the Journal of Investing, Financial Analysts' Journal and The Journal of Financial Behavior. Dreman has also written the highly respected "The Contrarian" column in Forbes magazine for some 22 years.
It is reported that Dreman came to contrarian investing the hard way. In 1969, Dreman, a junior analyst at the time, was following the crowd as the shares of companies with negligible earnings skyrocketed. He is quoted as saying, "I invested in the stocks du jour and lost 75% of my net worth." As a result of that painful lesson of following the herd, he became fascinated with how psychology affects investor behavior and became a contrarian investor. (For related reading, see Finding Profit In Troubled Stocks.)
Affiliations:
•Rauscher Pierce Refsnes Securities Corp.
•J&W Seligman
•Value Line Investment Service
•The Journal of Psychology and Financial Markets
•International Foundation for Research in Experimental Economics (IFREE)
•Dreman Value Management, L.L.C
Investment Style
David Dreman's name is synonymous with contrarian value investing strategies. His first book, "Contrarian Investment Strategy: The Psychology of Stock Market Success" (1980) is an investment classic. He has authored numerous scholarly investment articles in the Journal of Investing, Financial Analysts' Journal and The Journal of Financial Behavior. Dreman has also written the highly respected "The Contrarian" column in Forbes magazine for some 22 years.
It is reported that Dreman came to contrarian investing the hard way. In 1969, Dreman, a junior analyst at the time, was following the crowd as the shares of companies with negligible earnings skyrocketed. He is quoted as saying, "I invested in the stocks du jour and lost 75% of my net worth." As a result of that painful lesson of following the herd, he became fascinated with how psychology affects investor behavior and became a contrarian investor. (For related reading, see Finding Profit In Troubled Stocks.)
Bill Miller
Born: Laurinburg, North Carolina, in 1950
Affiliations:
•J.E. Baker Company
•Legg Mason Capital Management
•Santa Fe Institute.
Most Famous For: Bill Miller is the portfolio manager for the Legg Mason Value Trust (LMVTX) fund, which, under his management, recorded one of the longest "winning streaks" in mutual fund history. Between 1991 and 2005, the fund's total return beat the S&P 500 Index for 15 consecutive years.
Miller's fund grew from $750 million in 1990 to more than $20 billion in 2006.
Investment Style
In November of 2006, Fortune Magazine's managing editor, Andy Serwer, characterized Bill Miller's investing style as iconoclastic: "You simply can't do what he's done in the supremely competitive, ultra-efficient world of stock picking by following the pack …The fact is that Miller has spent decades studying freethinking overachievers, and along the way he's become one himself."
Bill Miller is a self-described value investor, but his definition of value investing is somewhat disconcerting to some traditional value investors. Miller believes that any stock can be a value stock if it trades at a discount to its intrinsic value.
He attributes two factors to his success: exhaustive security analysis and portfolio construction. In his 2006, fourth-quarter letter to the shareholders for Value Trust, Bill Miller explains how these two factors work:
Affiliations:
•J.E. Baker Company
•Legg Mason Capital Management
•Santa Fe Institute.
Most Famous For: Bill Miller is the portfolio manager for the Legg Mason Value Trust (LMVTX) fund, which, under his management, recorded one of the longest "winning streaks" in mutual fund history. Between 1991 and 2005, the fund's total return beat the S&P 500 Index for 15 consecutive years.
Miller's fund grew from $750 million in 1990 to more than $20 billion in 2006.
Investment Style
In November of 2006, Fortune Magazine's managing editor, Andy Serwer, characterized Bill Miller's investing style as iconoclastic: "You simply can't do what he's done in the supremely competitive, ultra-efficient world of stock picking by following the pack …The fact is that Miller has spent decades studying freethinking overachievers, and along the way he's become one himself."
Bill Miller is a self-described value investor, but his definition of value investing is somewhat disconcerting to some traditional value investors. Miller believes that any stock can be a value stock if it trades at a discount to its intrinsic value.
He attributes two factors to his success: exhaustive security analysis and portfolio construction. In his 2006, fourth-quarter letter to the shareholders for Value Trust, Bill Miller explains how these two factors work:
Benjamin Graham
Born: London in 1894; Died 1976
Affiliations:
•Newburger, Henderson & Loeb
•Graham-Newman Corporation
Investment Style
Morningstar's online Interactive Classroom carries this anecdote about the results of Ben Graham's investing style:
"In 1984, [Warren] Buffet returned to Columbia to give a speech commemorating the fiftieth anniversary of the publication of "Security Analysis". During that speech, he presented his own investment record as well as those of Ruane, Knapp, and Schloss [other successful investment managers who were students of Graham at Columbia]. In short, each of these men posted investment results that blew away the returns of the overall market. Buffett noted that each of the portfolios varied greatly in the number and type of stocks, but what did not vary was the managers' adherence to Graham's investment principles."
It is difficult to encapsulate Benjamin Graham's investing style in a few sentences or paragraphs. Readers are strongly urged to refer to his "The Intelligent Investor" to obtain a more thorough understanding of his investment principles.
In brief, the essence of Graham's value investing is that any investment should be worth substantially more than an investor has to pay for it. He believed in thorough analysis, which we would call fundamental analysis. He sought out companies with strong balance sheets, or those with little debt, above-average profit margins, and ample cash flow. (For more insight, see Introduction To Fundamental Analysis and Testing Balance Sheet Strength.)
Affiliations:
•Newburger, Henderson & Loeb
•Graham-Newman Corporation
Investment Style
Morningstar's online Interactive Classroom carries this anecdote about the results of Ben Graham's investing style:
"In 1984, [Warren] Buffet returned to Columbia to give a speech commemorating the fiftieth anniversary of the publication of "Security Analysis". During that speech, he presented his own investment record as well as those of Ruane, Knapp, and Schloss [other successful investment managers who were students of Graham at Columbia]. In short, each of these men posted investment results that blew away the returns of the overall market. Buffett noted that each of the portfolios varied greatly in the number and type of stocks, but what did not vary was the managers' adherence to Graham's investment principles."
It is difficult to encapsulate Benjamin Graham's investing style in a few sentences or paragraphs. Readers are strongly urged to refer to his "The Intelligent Investor" to obtain a more thorough understanding of his investment principles.
In brief, the essence of Graham's value investing is that any investment should be worth substantially more than an investor has to pay for it. He believed in thorough analysis, which we would call fundamental analysis. He sought out companies with strong balance sheets, or those with little debt, above-average profit margins, and ample cash flow. (For more insight, see Introduction To Fundamental Analysis and Testing Balance Sheet Strength.)
Carl Icahn
Born: New York City, in 1936
Affiliations:
• Icahn & Company (securities firm)
•Icahn Enterprises L.P. (NYSE:IEP)
•Icahn Partners (hedge fund)
•Controlling ownership positions in several major corporations
•Carl C. Icahn Center for Science at Princeton University
Investment Style
Renowned investor Wilbur Ross, Icahn's longtime friend and frequent adversary, referred to Icahn in a May 2007 Fortune Magazine article as "the most competitive person I know … he's especially good at terrorizing people and wearing down their defenses." For many corporate executives, that pretty much sums up Carl Icahn's business operandi and investing style.
Icahn's strategy involves targeting a company he thinks is poorly run and whose stock price is trading below value. He thrives when the markets are on a downtrend; when everyone else is selling, he starts buying. He accumulates enough of an ownership position to lobby for a position on the company's board of directors. Usually his first demand is to dump the CEO and, oftentimes, to consider breaking up the company into separate parts and selling them off. Wall Street professionals say that most of the time he is successful because he's intimidating and relentless. He's viewed as such a surefire moneymaker that investment managers typically start buying up the company's stock, which, whether Icahn is successful or not, leaves him with healthy stock price gains. (For related reading, see Evaluating The Board Of Directors.)
Affiliations:
• Icahn & Company (securities firm)
•Icahn Enterprises L.P. (NYSE:IEP)
•Icahn Partners (hedge fund)
•Controlling ownership positions in several major corporations
•Carl C. Icahn Center for Science at Princeton University
Investment Style
Renowned investor Wilbur Ross, Icahn's longtime friend and frequent adversary, referred to Icahn in a May 2007 Fortune Magazine article as "the most competitive person I know … he's especially good at terrorizing people and wearing down their defenses." For many corporate executives, that pretty much sums up Carl Icahn's business operandi and investing style.
Icahn's strategy involves targeting a company he thinks is poorly run and whose stock price is trading below value. He thrives when the markets are on a downtrend; when everyone else is selling, he starts buying. He accumulates enough of an ownership position to lobby for a position on the company's board of directors. Usually his first demand is to dump the CEO and, oftentimes, to consider breaking up the company into separate parts and selling them off. Wall Street professionals say that most of the time he is successful because he's intimidating and relentless. He's viewed as such a surefire moneymaker that investment managers typically start buying up the company's stock, which, whether Icahn is successful or not, leaves him with healthy stock price gains. (For related reading, see Evaluating The Board Of Directors.)
John Neff
Until his recent retirement, manager of the Vanguard Windsor Fund, now run by Vanguard Mutual Funds of Chicago, Illinois, USA.
Investment style
Hard-core value investment, based on buying good companies with moderate growth and high dividends while out of favour, and selling once they rise to fair value.
Investment style
Hard-core value investment, based on buying good companies with moderate growth and high dividends while out of favour, and selling once they rise to fair value.
Sir John Templeton
Retired, but formerly head of Templeton Investment Management.
Investment style
Deep-value contrarian with truly global perspective.
Investment style
Deep-value contrarian with truly global perspective.
William O'Neil
Chief Executive Officer, William O'Neil and Company, an advisory firm based in Los Angeles, California, USA.
Investment style
Growth stock trader with medium-term horizon (2-5 years).
Investment style
Growth stock trader with medium-term horizon (2-5 years).
Ralph Wanger
President of the Chicago-based Acorn Fund, run by investment firm Harris Associates.
Investment style
Theme-driven investment in smaller growth companies for the medium to long term.
Investment style
Theme-driven investment in smaller growth companies for the medium to long term.
Peter Lynch
Now retired, Lynch secured his reputation as one of the most successful fund managers in history while in charge of the Fidelity Magellan fund between 1977 and 1990.
Investment style
Highly active investment in a variety of stocks, with special emphasis on growth and recovery stories, and holding periods ranging from a couple of months to several years.
Investment style
Highly active investment in a variety of stocks, with special emphasis on growth and recovery stories, and holding periods ranging from a couple of months to several years.
Kenneth L Fisher
Founder and CEO of Fisher Investments, a California-based investment advisory firm deploying a global, top-down, dynamic asset allocation strategy. Ken Fisher also serves as Chief Investment Officer heading the three-member Investment Policy Committee overseeing all strategic investments decisions across the firm. Fisher Investments manages billions of dollars for high net worth investors and institutional investors globally.
Investment style
Top-down, global, and dynamic. Fisher doesn’t adhere to a static size or style, but positions portfolios based on client objectives and forward-looking expectations.
Investment style
Top-down, global, and dynamic. Fisher doesn’t adhere to a static size or style, but positions portfolios based on client objectives and forward-looking expectations.
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