In the world of investments, the phrase “crowded trade” is used to describe a security or an investment theme that has attracted an unusually large number of participants. As an investment idea becomes more and more popular, it attracts greater inflows of capital, but the fun never lasts forever. As contrarian investors, we want to [...]
With stocks displaying tremendous volatility and with bonds yielding next to nothing, it is no wonder that investors are looking for a state of perfect happiness beyond these traditional asset classes. In 1991, the grunge rock band Nirvana made alternative music mainstream with their album Nevermind. Today, in the world of investments, alternative asset classes [...]
“The key to making money in the stock market is not to get scared out of it.” – Peter Lynch, Fidelity Magellan Manager (1977-1990) Since the Standard and Poor’s 500 reached its near-term bull market high on April 29, 2011, we have experienced highly volatile trading on a day-to-day basis. Through it all, the result [...]
Renowned Green Bay Packers coach Vince Lombardi once stated, “Some people try to find things in this game that don’t exist, but football is only two things – blocking and tackling.” Success in investing, much like football, is not about completing the Hail Mary pass. Executing the seemingly minor tasks, like blocking and tackling, lead [...]
“I wish a buck was still silver. It was, back when the country was strong . . . When a man could still work, and still would. Is the best of the free life behind us now? Are the good times really over for good? Are we rolling down hill like a snowball headed for [...]
The commodity market is holding Ben Bernanke hostage. Exploding gasoline and food prices might force the Federal Reserve Chairman to raise interest rates despite his fears that the economy is too weak to stomach it. The Standard and Poor’s Goldman Sachs Commodity Index, an energy-heavy measure of commodity prices, is up about 43% from a [...]
Commodity prices are on a tear. Since touching a 52-week low on May 25, 2010, the Standard and Poor’s Goldman Sachs Commodity Index has risen more than 40% (first chart). This broad index represents a diversified group of commodities including energy, industrial metals, precious metals, agricultural goods and livestock (second chart). Oil prices have skyrocketed [...]
“We already talked about the 1% annual contract fee and the 1% rider fee, which we have found to be relatively standard in the industry. Now add another estimated 1% expense ratio for the underlying mutual funds. You are suddenly 3% behind the market each year before you even start, comparable to racing in the Daytona 500 with a hippopotamus strapped to your roof.”
