Re: What is your investment philosophy
To not retire ... And make the kids able human beings.
Re: What is your investment philosophy
^ Cant argue with that philosophy 
Today’s Wealthtrack hosted by the well respect Consuelo Mack had Don Yacktman (Value fund manager) as a guest. Here is th elink to Wealthtrack - WealthTrack | The Right Track to Your Financial Health
Highlights:
In 2012 44% of planners plan to increase their clients’ allocation to US stocks (65% in 2011).
In 2012 20% of planners plan to increase their clients’ allocation to international stocks (60% in 2011).
My take on this - looks like this is a nice contrarion situation.
Yacktmans goal - beat S&P 500 over a full market cycle - 10 years
Right now he prefers high grade AAA companies stocks. They are at the same price as fall of 2008, but have increased earnings. cash flow. Dont buy their bonds, since they only yield 2.5% over stocks.
Q: is it more difficult in this volatile environment to protect capital?
A: No. Volatility is the friend of a Value Investor. Take the case of fruits in a tree. Difficult to pick them up when they are high up. But if a heavy wind causes them to fall to the ground, you can clean up. We have a long time horizon.
In 2000, we did not buy tech stocks. Now MSFT, HP, CSCO are 25-50% of where they were. So we are finding value. Domicile not as improtant as where companies have footprint - need to have exposure to US and emerging markets.
Q) what is your criteria for buying a company
A: You buy cash flow over time. Know what the management has done with cash before (not what they are promising to do now). My preference of cash allocation
- Invest in your crown jewel product line
- Acquisition - pick up good companies at good prices - (not like HP paying huge premium for Autonomy)
- Dividends
- Sit on cash
With the expected increase in dividend tax rate, may be better for companies to buy back stock.
(My take - this is true inly if stock is fairly priced or undervalued.)
In our fund, we have15% in cash normally - to take advantage of sudden opportunities. As of now, the cash reserve is 12%.
Re: What is your investment philosophy
I give all my money to my hubby to invest wherever he wants as in this field his judgement is better than mine.
Re: What is your investment philosophy
i bet he just gives it to his mother.
Re: What is your investment philosophy
^ great segway to a MIL thread in Business forum!
Re: What is your investment philosophy
Following up on post 20 re: pension plans, todays WSJ had a very interesting piece on the effect of sustained low rates. As the Fed keeps short term rates low, the long term rates are expected to come down - flattening of yield curve. So let us assume the pension fund owes $100 Million 10 years down the road. Since the discount rate used is typically close to long term treasury yield, this makes the net present value of those future obligations higher. So this will take a bite out of earnings since they would have to use earnings to shore up deficit.
Another twist - companies buy long term assets (like treasuries) to match long term liabilites. This puts further downward pressure on long term rates. Which decreases discount rates further. Increases NPV of future obligations!
Moral of story - read SEC filings to get a handle on pension obligations.
Re: What is your investment philosophy
Then it is safe! she don’t have anyone else in this world to give it to, my hubby is the only child she has:)
and secondly I am no match to her, a jattni is no match to panditain when it comes to brain wars:disgust:
point noted, better it is not derailed!
Re: What is your investment philosophy
Then it is safe! she don’t have anyone else in this world to give it to, my hubby is the only child she has:)
and secondly I am no match to her, a jattni is no match to panditain when it comes to brain wars:disgust:
point noted, better it is not derailed!
Re: What is your investment philosophy
To not retire ... And make the kids able human beings.
How many kids do you have and how old are you and your kids now ?
By making kids able, I believe you are talking about giving them college education that will secure their futures financially.
But a college education costs an arm and a leg these days.
Are you in a good situation as far as that is concerned ?
Re: What is your investment philosophy
The US market is now 20% above its low. So today all the pundits on TV were bullish. They were touting the fact that parket P/E is 13 (or 13.5) and can expand to 16.
Re: What is your investment philosophy
Does it mean that this is a rare window to sell all mutual funds and throw the money in stable options to secure wealth ?
Re: What is your investment philosophy
^ I am not a market timer - so I would not know. I was just pointing out the herd mentality in Wall street - when stocks are low, no one recommends them, stocks climb by 20%, and people suddenly like them.
I try not to predict where market goes short term - because it is impossible. owever, if you have a 5 year or greater time horizon, the market still loks attractive based on metrics such as P/E, P/sales etc.
Re: What is your investment philosophy
Of late, there have been threads about Gold, Real Estate etc as to if this is the time to buy. Fears about the European Sovereign debt has also caused a lot of alarm, with people leaving the stock market in droves. It appears the outflow from US stock market hit a high recently, similar to outflows during March-April of 2009.
So what is your investment philosophy? Are you a long term investor, picking up assets out of favor, or do you focus on econmic developments to guide your investment selections? Does momentum play a role in your investment decisons, or are you a strictly bottom-up person - assigning value to the asset and picking it up if the price goes well below your assigned value?
hmm this question has made me think ya know!. Well the other day my friend who works at TD bank here told me that i should i invest on GICs. Apart from that if i get my savings up i was planning to buy gold. Coz honestly i don't trust fluctuating currencies. Also i don't trust the stock market either. I am cautious when it comes down to investment. But at the moment..i am saving up for the wedding supposely!.
Re: What is your investment philosophy
^ Wishing Xtron and future begum the very best!!
Re: What is your investment philosophy
haha..yaa still have to find bride ya know!.
Re: What is your investment philosophy
Today's Consuelo Mack's show (wealthtrack) had a terrific guest - he runs a Global value fund - I forget his name and name of fund - butyou can check at wealthtrack.com
He said market right now fairly valued. He loves slow growth companies with predictable cash flows, earnings etc. Does not like to pay u for companies. So shunned MSFT, CSCO in 2000, but boughht them recently. Buy enterprises with good business model at attractive prices. Have some cash as ballast to pick up stuff when they get cheap.
Re: What is your investment philosophy
To plan our finances in such a way that they never ever give us sleepless nights!
Re: What is your investment philosophy
^ Cant beat that!
Re: What is your investment philosophy
A wise member Mr. Player recently talked about the enterprise value to free cash flow for apple trending higher, thus making it more expensive relative to say 1 yr ago.
Enterprise value = market cap + debt-cash. So more debt and less cash a company has, more the enterprise value - in other words the more you end up paying for it.
Based on this metric, I expect Dupont, Dow, AT&T (to name a few) to be unattractive - from what I recall about their balance sheet.
Thanks Player - this metric is something I plan to add to my screening and evaluation process.
Re: What is your investment philosophy
This thread is not meant to promote trading, speculation etc. In fact individual stock investing can be downright dangerous. My personal view is those who dont have thime should dollar cost average into index funds - preferable Totak Market Index funds, with low management fees. Anyway, for those interested in actively managed mutual funds, there is something called a Sharpe ratio (WSJ April 5 2012). This is nothing new, and many of you are probably aware of it.
Sarpe ratio = (Return of fund - risk free return)/standard deviation of its return.
The article states use 3 year average return. For risk free return, use 3-month Treasure return over same period. Now, the 3-mo Treasury return is close to 0.
The Sharpe ratio of S&P500 for 10 years thru March 2012 is 0.22, with a 10-yr annualized return of 6.6%. First Eagle Fund and a few others have Sharpe Ration ~ 0.4-0.6, with 10-yr return of 7-8%.
If two funds have same return and one of them has higher Sharpe ratio, than the latter is "safer" - same return with less volatility.
This works well when choosing funds from same category. Using at least 3 years of returns was advised, preferably 10 years, which can capture more than 1 business cycle.
Of course, Sharpe Ratio only provides info on past performance. IMO, nothing to beat low cost well run index funds.