Gardener

80 Billion Dollars!

Thanks Roger. As with most retail advice such as Swedroe peddles the talk is all too simplistic but it is also a one shoe fits all approach. 60/40, buy and hold, etc do not take into account our individual needs. I have no interest in matching or beating an equity index and I'm not sure why there is this American obsession with equities in general. I do feel as though this canned advice that so many of these book writers publish does not serve most of their readers.

Markets Aren't as Benign as They Look

From Fidelity huh?


On Aug 21 05:04 PM Crocodilian wrote:

> Author writes:
> 2009 has seen an extraordinary rally by more speculative assets,
> leaving “value” behind in the dirt. As Rob Arnott suggested two weeks
> ago, the gulf between “value” and “growth” stocks, for example, has
> only been more marked once in history – at the height of the dotcom
> boom.
> ----------------------...
>
> I'm a little puzzled by this assertion. The data I've seen state
> quite clearly that growth stock valuations are historically cheap
> relative to value stock valuations.
>
>
> From a recent Fidelity white paper (full link at bottom):
> As of the end of July, growth stocks were about as inexpensive on
> a price-to-trailing earnings (P/E) ratio basis relative to value
> stocks as they’ve ever been (see Exhibit 2). This unusual valuation
> discrepancy (value stocks typically have lower P/Es than growth stocks)
> is due largely to recent quarterly earnings growth declines in the
> financial sector—which make this sector look more expensive on a
> P/E basis. Based on analysts’ forecasts of future earnings over the
> next 12 months, the earnings of financials and value stocks are expected
> to rebound in coming quarters, which would make value stocks once
> again cheaper than growth stocks. However, even on a forecasted P/E
> basis, growth stocks are currently valued at the lowest levels on
> record relative to value stocks. Other valuation metrics, such as
> price-to-sales and price-to-book ratios, show that growth stocks
> remain below, but somewhat closer to their long-term average valuations
> relative to value stocks.3
>
> Source: news.fidelity....

Why Do Equity Markets Disagree with the Data?

I would not look to the CPI as a measure of inflation. Not including energy and food prices in the metric makes it utterly useless except of course to the government.
I would also look to the low volume as an indication that equities should be avoided.

Lazy Portfolios, Or, The Revenge of 60/40

Why would anyone advocate laziness in protecting wealth?

Short-Selling Hedge Funds Started the Fire

He should have been more explicit in his article. Another voice contributing to the chorus of anti shorting is irresponsible.


On May 14 07:23 PM Alan Young wrote:

> Gardener: Obviously, you didn't watch the video. It's not about short-selling,
> it's about NAKED shorting--flooding the market with bogus stock with
> no intention of buying shares to settle the trade.
>
> Judd: a nice piece of work; I respect your research. But it's too
> long for a video-clip education. Please publish it as text w/graphics
> for easier digestion and citation.

Short-Selling Hedge Funds Started the Fire

Very naive to blame short sellers. Shorts kick the tires and provide the markets with critical information as to the health of companies. Enron is am excellent example. Those who don't understand how vital short selling is to free markets should really spend more time in the library than posting silly articles with childlike understanding of markets.