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Momentum Investing and What I have Learned from Warren Buffett

Posted on Thursday, 27 March 2014 19:43:50 Momentum Investing and What I have Learned from Warren Buffett

In an effort to maximize my time, I intend to stop posting to the blog separate from the quarterly newsletters/updates that I send to my clients.  That said, I reserve the right to change my mind, especially if I am told that people are actually reading what I write. As part of this change, I do not intend to continue the monthly momentum investing updates.  Please trust that I am still performing them and still believe in that investing methodology.  In fact, I have changed the methodology…

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POSCO Steel--Value Stock or Value Trap?

Posted on Tuesday, 21 January 2014 18:48:26 POSCO Steel--Value Stock or Value Trap?

With the U.S. stock market somewhere between fairly valued and expensive, it is important to be willing to look outside the U.S. for value opportunities.   When I look for value stocks for my “deep value” portfolio, I require a greater margin of safety than in my dividend growth stock portfolio.  Currently, I am looking for stocks that I believe are undervalued by 50% or more.  To determine whether that margin of safety exists, I perform a relative value analysis and a discounted cash…

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GTAA January 2014 Update

Posted on Monday, 06 January 2014 17:52:38 GTAA January 2014 Update

GTAA January 2014 Update For my clients that are applying Global Tactical Asset Allocation, there are two changes this month.   Specifically, emerging market stocks, as represented by VWO, and foreign REITs, as represented by RWX, both moved to cash from being owned.  As I mentioned in my New Year’s post, I want to write more about investing philosophy this year, and I will do so by starting with a 30,000 foot view.  At the broadest level, there are traders and there are investors. …

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2013 Year in Review and a Look Ahead

Posted on Wednesday, 01 January 2014 22:35:01 2013 Year in Review and a Look Ahead

2013 Year in Review and a Look Ahead I hope that everyone enjoyed the Holiday season and some extra time with their families.  Looking back to the beginning of 2013, I focused my expectations on larger economic factors much more than specific stocks.  I had concerns regarding U.S. government shutdowns, significant inflation in the U.S. and the weakness of the US recovery.  I expected a U.S. stock market correction in 2013, and not a significant return overall.  I expected interest…

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Recent Articles on Buy and Hold versus Value Investing and the Value of Dividends

Posted on Sunday, 15 December 2013 20:56:24 Recent Articles on Buy and Hold versus Value Investing and the Value of Dividends

In a recent series of articles, Morningstar has touched on two topics that are of great interest to me: buy and hold investing versus value investing, and the role of dividends in investment returns over long time horizons.  The first article looked back at the history of two groups of academics: those who believed in the efficient market hypothesis and those who believed that behavioral tendencies created market inefficiencies.  Both sides feature Nobel Prize winners.  The article…

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Global Tactical Asset Allocation December 2013 Update

Posted on Saturday, 07 December 2013 19:24:33 Global Tactical Asset Allocation December 2013 Update

The buy/sell signals for the various asset classes that I track are unchanged from November and October.  I view this as further support of using a ten-month lookback (and only evaluating monthly) in determining momentum signals, in that some of the minor fluctuations in the market have not created sell signal that would be later reversed as the stock market continues its upward trajectory.  As a result, the buy/hold signals are U.S. large, mid and small cap stocks, foreign large and…

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Global Tactical Asset Allocation November 2013 Update

Posted on Monday, 11 November 2013 21:04:28 Global Tactical Asset Allocation November 2013 Update

There are no changes to the hold/sell categorization of the various market segments compared to last month.  As a result, please review last month's article for a quick list of the signals.  As someone that is enjoying momentum investing methodologies while being keenly aware of their risks, it is reassuring that there are some months that do not suggest any changes, which bodes well for keeping costs and taxes low. I want to use this opportunity to discuss two different topics.  The…

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Global Tactical Asset Allocation October 2013 Update

Posted on Wednesday, 02 October 2013 08:00:09 Global Tactical Asset Allocation October 2013 Update

In a prior article, I described a concept called Global Tactical Asset Allocation (GTAA) and how it applied to indicate which asset classes should be owned and which ones should not.  There are many variants of the GTAA and many similar asset allocation concepts based on momentum with other catchy names.  In future monthly updates, I intend give additional information about the GTAA and its variants. Here is the suggestion of buy/hold versus sell/cash based upon closing prices of…

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Back to Basics--Types of Investments

Posted on Sunday, 08 September 2013 20:29:57 Back to Basics--Types of Investments

This is the seventh article in a ten part series about the basics of financial planning and investing.  The first six articles discuss the financial planning process.  This article and the next three are going to pertain to the basics of investing.  In this article, I am going to briefly discuss many of the different types of investments.  I will give some pros and cons of each and mention the extent to which I use them with my clients. Stock represents partial ownership of a company.…

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Global Tactical Asset Allocation September 2013 Update

Posted on Thursday, 05 September 2013 21:08:00 Global Tactical Asset Allocation September 2013 Update

Global Tactical Asset Allocation (GTAA) is a catchy name to describe a particular type of investment allocation strategy.  There are many such names to describe numerous types of investment allocation strategies, many of which overlap and build upon one another.  In this case, GTAA describes the asset allocation strategy suggested by Mebane Faber, among others.  To complicate things further, there are two variants of the GTAA that I use with some of my clients.   My implementation…

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