MiddleOfRoader

Pension Underfunding: The Next Earnings Shock?

Is real estate cheap in Nebraska? I believe that is the only state which does not have unfunded liabilities, as they are barred in the state constitution. Then I would only have to worry about unfunded Federal promises.

Cramer's Lightning Round - The Most Dangerous Stock for 2009 (12/23/08)

IMO Cramer is no worse than other low-cost investment advice sources.

I subscribed to two monthly investment newsletters, and the advice coupled with the timing of that advice was so bad I had to subscribe to Morningstar as a check on those letters. The Morningstar ratings provided a false sense of security. As the year wore on and time after time either earnings or future forecasts came in below previous guidance, Morningstar would suspend the cratered stock's ratings as "Under Review". A couple week's later the "fair value" would be slashed 20% - 50%.

Last year, almost no energy stocks were rated highly by Morningstar, as Morningstar said they do not earn the cost of capital over a full cycle. In the midst of the big run-up in oil prices, Morningstar changed their model, with the new model basically assuming something close to the current oil price would continue indefinitely. All of a sudden, most energy stocks seemed to be highly rated, a couple of months before they all fell off a cliff.

At least Cramer went bearish on almost everything around the end of September, and viewers who followed that call probably saved themselves 20% - 30% if they were still invested at that point. Most other sources of advice kept preaching the benefits of sticking to a long-term allocation.