Mike McGinley

The End of Asset Allocation

The real problem is not that asset allocation failed. It was that most did not get the allocation correct. Most investors had/have something like this:

70% stocks (domestic, foreign, REITS, etc)
30% bonds (with a large portion of this in lower quality bonds)

It only required common sense to realize that a portfolio like this was not really diversified. A better allocation would be one like this:

50% stocks and lower quality bonds
10% gold
40% high quality bonds (government) and cash

Unfortunately, so many investors are convinced their portfolios MUST have lots of stocks.

Is Buffett Really Losing His Touch?

He is buying in a bear market. Clearly, he has lost his touch.

Everybody is a trader nowadays. How can Buffett not be trading his account?

Everybody is going to buy at the right time, just before a rally. Who knows, maybe Buffett is waiting to buy 8 million shares of SSO at exactly the right time (like everybody else). I hear he is contemplating 3X.

Opportunity in the Paulson Backlash

All this bullshit was an asset grab. Incredible.

Personal Income and Spending: Saving is the New Trend (Again)

The return of the American saver is good news. It had to happen at some point and, while there will be some difficult economic issues because of it, in the long run it is a great thing.

Substantially higher savings will help rebuild a better economy in the future and it will save the dollar.

So We Find a Bottom - Then What?

Good article. I run a small advisory firm in Phoenix and was shaking my head when Dennis Gartman was discussing on CNBC the awful effects of boomers continually selling stocks over the next several years to fund retirement. I have a lot of respect for Gartman but I think this common belief misses the boat. The fact is that most boomers with substantial wealth will always maintain a balanced portfolio with lots of different asset classes. They will probably maintain this until the day they die (at least that is what I recommend). In my opinion, liquidations are a small part of the story.

Boomers without a decent size portfolio will probably work for a longer period (which is a good thing all around). Most of them cannot afford to spend 30 years in retirement and, as such, most will not do so.

Four Myths About the Free Market and Its 'Demise'

"For well over a century, the appeal of government intervention has been the Fed's ability to act as a mediator seeking the best solution for everybody, instead of simply letting various interests fight to the death."

Are you kidding me? The Fed seeks the best solution for everybody? Really? Like protecting savers, retirees, the poor, and those who are prudent with their money?

The quality of life of most Americans is lower than it should be because of one organization: the Federal Reserve. Yet, somehow the author wants you to believe that it finds "the best solution" for everybody.

Changes in P/E Ratios During the Current Bear Market

"This is definitely a concentrated bear market, where a couple sectors have caused all the problems."

Yes, for now. I remember managing client's portfolios in 2001 and thinking, gee this isn't so bad; all the value stuff has helped clients do OK. Of course, then 2002 came around and the bear market arrived in earnest.