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Charles Lewis Sizemore, CFA

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  • 3 Questions Investors Should Be Asking [View article]
    Nassim Taleb has a unique trading style that wouldn't be appropriate for most investors. To oversimplify a little, he essentially buys insurance when its cheap, losing a little money day after day or even year after year, until one day...BOOM. He gets a huge payoff at one time if the event he insured against ever actually happens. That's how he walked out of the 1987 Crash a wealthy man.

    Still, even while his trading style is not appropriate for most investors, his basic insights can be applied.

    You want investments that are "black swan proof." In the case of stocks, ALL stocks are subject to wild price swings due to black swan events. But conservatively-financed companies with stable demand for their products at least have business models that are (mostly) black swan proof. If the price takes a temporary nose dive, you're still getting your dividend check while you wait for it to recover.

    (Of course, "business model black swans", like a new disruptive technology, happen every day, but that is a different story for a different article.)

    Aug 9, 2011. 04:02 PM | 1 Like Like |Link to Comment
  • The Day After: Stay Away From Gold, Treasuries; Buy Solid Blue-Chip Stocks [View article]

    I actually agree with you on Japan; it seems that betting against Japanese bonds is a rite of passage that every macro hedge fund trader has to go through, and like fraternity hazing it doesn't end well.

    They will eventually be "right" in that, at some point, Japan will finally blow up and its yields will soar to junk levels. But these things can plod along in equlibrium for a long time before that happens, and none of us are likely to be the ONE guy who times it right.

    John Mauldin's Endgame gives a good analysis of the scenarios facing Japan. Mauldin is also smart enough to be vague on the specific timing.

    Aug 9, 2011. 10:41 AM | Likes Like |Link to Comment
  • The Day After: Stay Away From Gold, Treasuries; Buy Solid Blue-Chip Stocks [View article]
    Victor H Austin,

    I actually like Apple and consider it to be attractively priced, particularly when you consider its cash hoard. I just have a real hard time putting my investors' capital at risk on a stock that depends so heavily on the talents of one man--one man who happens to have a life-threatening disease. That's an unquantifiable risk that's hard to justify given that there are plenty of other stocks to choose from at the moment. Still, so long as Jobs remains healthy, your Apple stock should do well.

    Best of luck,
    Aug 8, 2011. 11:45 PM | 2 Likes Like |Link to Comment
  • The Day After: Stay Away From Gold, Treasuries; Buy Solid Blue-Chip Stocks [View article]
    Dark Charro,

    You know the drill: you should always keep a little in cash for basic necessities. But other than that, I do like gas MLPs (particularly the ones with minimal exposure to gas prices) and some REITS, though these are a little pricey these days. Depending on your local market, an income-producing investment property might be a good idea. Be careful there though, and allow for a wide margin of safety. Make sure your estimate for rents is conservative.

    And as always, you could take a stab at starting your own business.

    Aug 8, 2011. 08:43 PM | 1 Like Like |Link to Comment
  • The Day After: Stay Away From Gold, Treasuries; Buy Solid Blue-Chip Stocks [View article]
    Thanks, Abec. I judge the quality of a recommendation by the amount of hate mail I get from it. And by that criteria, this must be the best advice I've ever given in my life...

    Good luck navigating the storm,
    Aug 8, 2011. 05:24 PM | 9 Likes Like |Link to Comment
  • Visa: Fed Reversal Means Big Profits for Contrarian Investors [View article]

    I like MA too, though I was attracted to Visa for its better presence overseas. Both are attractive at current prices.

    Thanks for the comment,
    Jul 6, 2011. 01:45 PM | Likes Like |Link to Comment
  • RIM Proves Why You Can't Just Pay Attention to Fundamentals [View article]
    "They aren’t overvalued; there is no such thing as overvalued. Everything is valued just where it should be, based on supply and demand."

    Wow. I'm not sure what to say to that. These are words that could be taken out of the mouth of an efficient market ideologue. I suppose Miami condos in 2005 were "valued just where they should be," as were dot com stocks in 1999.

    The comments on Buffett being a successful investor because he already has money are just flat out ignorant. His returns have decreased as Berkshire has grown in size, as Buffett himself points out.

    Hey, I agree that in the short-term, fundamentals don't matter. The market is driven by emotions, with a fair bit of statistical noise. Value investors are often "early" and take losses in the beginning. But this article would seem to excuse a casino gambling approach to the investment process.
    Jun 17, 2011. 02:07 PM | 1 Like Like |Link to Comment
  • Visa and MasterCard: Looking Beyond Durbin [View article]
    Neal, good catch; you are indeed correct about the Fed setting the limit, not the Amendment itself. I too was surprised that the amendment didn't get scrapped or "postponed" indefinitely. I guess it helps that the amendment's namesake is one of the most powerful men in the Senate...

    Jun 14, 2011. 02:18 AM | Likes Like |Link to Comment
  • The Anne Hathaway Index: A Boon for Berkshire? [View article]
    Now now, Ole Grumbler, where is your sense of humor? ;)
    Jun 1, 2011. 12:02 PM | Likes Like |Link to Comment
  • Choosing the Right Dividend ETF [View article]
    Thanks, Tack.
    Apr 24, 2011. 09:59 AM | Likes Like |Link to Comment
  • Choosing the Right Dividend ETF [View article]
    Anon, I don't know of a one-stop shop, unfortunately. Wisdom Tree has some interesting funds, and I'm a fan of PowerShares' PID. If I were you, I'd just Google "international dividend ETFs" and spend a couple hours seeing where the links take you.

    Apr 23, 2011. 10:23 AM | Likes Like |Link to Comment
  • Japan Is Not a Bargain [View article]
    It shocks me how quickly Japanese ETFs rebounded. I had every intention of backing up the truck and loading up on Japanese stocks when it looked like the world was ending. I never got the chance. Shares rallied so hard and fast that they have already recouped half the the losses after the earthquake. There is probably some more upside, but it not a wildly compelling trade at this point.

    It's not much of a contrarian bet when everyone else is doing it too...
    Mar 21, 2011. 12:44 PM | 2 Likes Like |Link to Comment
  • Choosing the Right Dividend ETF [View article]
    Robber Barron,

    Thanks for the comments. A high expense ratio is a big deal for long-term capital gains, as it can act like sandpaper, slowly whittling away your returns. But it is not relevant to the current yield, which is net of fees.

    Turnover is a problem in that it generally means a higher expense ratio, and it also create capital gains that get passed on to investors. Just as with mutual funds, if your ETF sells a holding at a gain, those taxable gains are passed on to YOU.

    Of course, the tax issues are moot if held in an IRA.

    Thanks again for the comments!

    Mar 7, 2011. 09:42 AM | Likes Like |Link to Comment
  • Visa Investors Should Shrug Off Durbin Amendment Worries [View article]
    Old Trader,

    You bet, that technology is very real. The question is one of payment network. If you use your phone to make a payment, it has to be linked to something, such as a credit card, bank account, or even something like Paypal. Just as a check is nothing more than a written order to pay from a checking account and a credit card is nothing more than a piece of plastic linked to a credit line, your phone is merely an instrument that links to a payment account.

    Visa and Mastercard will both be a big part of new rollouts like these. The next few years should be very interesting!

    Feb 23, 2011. 11:00 AM | Likes Like |Link to Comment
  • Get a Head Start on the Chile-Colombia-Peru Exchange Merger With New Global X ETF [View article]
    Indeed. Good call!
    Feb 18, 2011. 07:15 PM | Likes Like |Link to Comment