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Thomas Kennedy

 
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  • How A Billionaire's Portfolio Can Boost Your Returns [View article]
    I'd be curious to see backtesting as well. I would say a fair amount has to do with valuation especially over the short term and during bubbles, but a number of people on the current list have remained there for a while and their company's have reasonable current valuations.

    I'd say this list finds companies with:

    A) attractive fundamentals and growth
    B) bubble like valuations

    Also, in a backtest, I'd say the weighting of the portfolio would significantly affect its results. A market cap weight or equal weight portfolio may underperform or market perform, especially if the start year is during a bubble, but if its fundamentally weighted (by earnings, cash flow, etc) that would help filter out the companies with outrageous valuations and keep the better performers.
    Sep 18 02:01 PM | Likes Like |Link to Comment
  • How A Billionaire's Portfolio Can Boost Your Returns [View article]
    Thank you for reading.

    I had addressed that above with: "This figure [revenue growth] is backward looking, however, and many of these companies' growth rates are bound to slow in coming years. In order to find a worthwhile investment, investors must look to the future. Companies which have entered the more mature phase of their life cycle, such as Fox , Wal-Mart (NYSE:WMT), and Nike (NYSE:NKE) may not be able to create as much wealth going forward. Even Buffett has stated that Berkshire's growth going forward is likely to be significantly lower than past rates due to the difficulty in sustaining fast growth as a larger company."

    A lot of people would say that many of the companies mentioned in the article still have impressive returns ahead, however.
    Sep 17 05:14 PM | Likes Like |Link to Comment
  • Earn Equity-Like Returns With Less Risk In CWB, The Market Leading Convertible Bond ETF [View article]
    Thank you for reading, its tough to find much thats not near its highs at this point!
    Sep 11 01:06 PM | Likes Like |Link to Comment
  • Why This Spin-Off ETF Keeps Beating The Market [View article]
    I was considering adding a comparison to a small cap ETF, but felt it was less relevant than comparing it to a midcap ETF as CSD's average market cap is as much as 4 times that of small cap ETFs.
    Sep 11 01:00 PM | Likes Like |Link to Comment
  • Why This Spin-Off ETF Keeps Beating The Market [View article]
    Agreed gemfinder, this fact can't be expressed enough. The fund has tended to underperform during economic contractions and outperform during expansions, with a net result of outperformance over the last economic cycle. Especially now, this fund should be seen as a long term investment.
    Sep 10 01:13 PM | Likes Like |Link to Comment
  • Why This Spin-Off ETF Keeps Beating The Market [View article]
    That depends... I look to vary position weights over the economic cycle so as to reduce exposure to smaller cap and higher beta positions after protracted market gains and add to them after significant market corrections. For an investor already long csd I would recommend reducing exposure to half or a third of the maximum amount an investor would want to put into the fund. For someone without a position I would recommend adding a small position (similar to above) with the expectation of adding to the position during a market decline.
    Sep 9 07:38 PM | 1 Like Like |Link to Comment
  • Why This Spin-Off ETF Keeps Beating The Market [View article]
    I would say this is largely due to the funds impressive performance the year prior. With a fair amount of the fund remaining the same year to year its difficult to lap good results, but overall 2 year performance was stellar, as well as results over longer time periods.
    Sep 9 02:26 PM | Likes Like |Link to Comment
  • Why This Spin-Off ETF Keeps Beating The Market [View article]
    Thanks for the comment Ibex. In my research for this article I hadn't seen much info on longer term performance, but it makes sense that the company will continue outperforming given that it still benefits from the same tailwinds. Would you be able to provide any additional info or links?
    Sep 9 02:23 PM | Likes Like |Link to Comment
  • Markit - Appeal At This High Quality, Highly Profitable Business [View article]
    Just found the company through researching WYDE, a new CDS ETF based on one of their indexes. I'm very interested in the company and appreciate your timely analysis. I too think the valuation is attractive (especially relative to MSCI, MORN, etc) and look forward to researching more about the company.
    Sep 5 06:50 PM | Likes Like |Link to Comment
  • Protect Your Portfolio And Profit When Equity Markets Are Declining With The New CDS ETF [View article]
    As stated above the terminology is just somewhat reversed for CDS as shown by the names of the contracts and the notional principal stated on the proshares site
    Sep 4 10:45 AM | 1 Like Like |Link to Comment
  • Protect Your Portfolio And Profit When Equity Markets Are Declining With The New CDS ETF [View article]
    Actually this is just because of odd terminology for CDS contracts where the short is the party betting against the credit of the party/index.
    Sep 4 10:43 AM | Likes Like |Link to Comment
  • Protect Your Portfolio And Profit When Equity Markets Are Declining With The New CDS ETF [View article]
    Its "decay" should be significantly less than that of VIX products for a number of reasons. First, most VIX products roll far more frequently than WYDE's annual rolls. Secondly, I would expect the roll costs to be relatively smaller due to the differences between the future products, with the current roll costing only 0.5% per year.
    Sep 3 04:58 PM | Likes Like |Link to Comment
  • Protect Your Portfolio And Profit When Equity Markets Are Declining With The New CDS ETF [View article]
    The ETF has grown quickly so far so hopefully so its liquidity should imrprove over time. I'd also expect options to be available on it sometime soon as well.
    Sep 3 04:26 PM | Likes Like |Link to Comment
  • Credit Default Swap ETFs Are Not Worth The Risk [View article]
    Hi Robert,

    You have some amazing analysis and descriptions of the product but I disagree with your conclusion (on WYDE, I agree 100% on TYTE). I, like Burt above, feel WYDE is a good hedge for a high yield or equity investment due to its high negative correlations with both. I also believe that the 100 securities covered by the fund are adequate to protect a diversified high yield bond fund, and that holding the 2 series (and being able to actively switch to new series over time) is a fair method of extending the duration of credit exposure.

    I am considering writing an article on WYDE; if I do, I plan on linking to this for a contrary perspective and its thorough analysis.
    Aug 22 03:47 PM | 1 Like Like |Link to Comment
  • What Is 'Quality' In A Stock? [View article]
    Very good, very approachable article with a lot of my favorite companies mentioned. As to your question on the Modern Portfolio Theory's factors (Profitability, Growth, Safety, and Payout), these follow very closely to that of the "justified P/E ratio" (see http://bit.ly/1lLALuu). This calculates, based on the classic gordon growth model for valuation, an acceptable P/E ratio for a company. The formula is P/E = (Payout ratio) x (1 + growth rate) / (discount rate - growth rate). This includes all of the 4 factors but profitability, which as described above, is the return on equity and a very important factor in determining long term growth rates.
    Apr 24 09:18 PM | 2 Likes Like |Link to Comment
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