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Why Consistency Matters More Than Absolute

by: Lawrence Hamtil  on Thursday, April 28, 2016

Those of us who are market buffs like to sit around and contemplate how much wealth one would have if only we had gotten into a lottery ticket stock at the entry-level price.  For example, I looked at Oracle (ORCL) stock the other day.  Using my Morningstar hypothetical database, I was able to calculate that if I had been able to buy the stock at its IPO price in March, 1986, I would now have about $6.96 million.  A tidy little 24.31% return.   Read More

One Stock For The Next Decade?

by: Lawrence Hamtil  on Tuesday, April 26, 2016

Last month, Bloomberg's Joe Weisenthal asked, "If you had to buy one stock for a newborn (not an ETF) to hold through college, what would it be and why?"  If you scroll through the thread you can see that suggestions poured in from both lay people and industry professionals.  Many suggested biotech firms such as Gilead (GILD) and Illumina (ILMN), while others promoted technology such as Google (GOOG) and Amazon (AMZN).  My personal suggestion was Altria (MO).  This post will deal my reasoning for suggesting it. Read More

Your Industry Guide to the Shrinking Stock Market

by: Lawrence Hamtil  on Wednesday, April 20, 2016

There's a lot of chatter today about the major decline in publicly traded firms (h/t Ritholtz Wealth's Josh Brown).  This is not a revelation; industry commentators have been discussing the phenomenon for several years now.  I am sure there are several explanations for this:  the financial crisis forcing many banks to merge or go under; the tech bubble's bursting laying waste to many firms that IPO'ed prematurely, etc.  However, determining the causes of the change in the capital cycle is not the point of this post.  Rather, I am going to show which industries have added and subtracted the most companies over the last few decades just to give some perspective to what has transpired in the public markets. Read More

A Few Thoughts On Brazil

by: Lawrence Hamtil  on Tuesday, April 19, 2016

Brazil has captured a lot of headlines so far in 2016.  By some measures, Brazil's economy is contracting at a pace not seen in a century; inflation is rampant; and corruption rife.  However, aided by some external events such as a drop in the dollar and a corresponding rise in commodity prices, anticipation of political change (over the weekend, Brazil's lower house of Parliament, the Câmara dos Deputados, voted to impeach leftist  president Dilma Rousseff) has propelled Brazil's stock market this year, and it's among the top performers year-to-date.   Read More

What the Military Can Teach Us About Investing

by: Lawrence Hamtil  on Sunday, April 10, 2016

Like most armchair generals, I enjoy reading about military history, particularly about strategy and tactics.  One thing I've learned, however, is that reading classics such as Carl von Clausewitz's On War and Sun Tzu's The Art of War doesn't just satisfy a curiosity or historical interest.  These types of books cover many basic principles that can easily be applied to most endeavors in life.  It's one of many reasons why The Art of War is often listed as among the best business books to read.  The lessons learned aren't merely theoretical; in my many years in financial services and portfolio management, I've learned that some military maxims such as "concentration of force at the decisive point" and "no battle plan survives contact with the enemy" apply very much in a practical sense to investing. Read More

The "Obvious" Trades Are Anything But

by: Lawrence Hamtil  on Thursday, April 07, 2016

In February, we touched on the fad of currency-hedged ETFs, and how currency-hedging your foreign equity exposure can actually hurt diversification in your portfolio.  This topic couldn't be more relevant now given the turmoil in the markets caused by a surging yen, currently at 17 month highs, despite the Bank of Japan's Herculean efforts to weaken the yen.  In fact, since adopting negative interest rates (known as "NIRP"), on January 29th of this year, the yen (as measured by its CurrencyShares equivalent, FXY) has surged almost 10%! Read More

Rising Rates and Stock Returns

by: Lawrence Hamtil  on Wednesday, April 06, 2016

Ben Carlson recently wrote about the trouble with single-variable analysis in predicting stock market returns, specifically as it relates to the importance of profit growth.  He dispelled the myth that high profit growth is necessary for stocks to do well. Read More

Digging Further Into the Recent Weakness in European Stocks

by: Lawrence Hamtil  on Friday, April 01, 2016

Ben Carlson of A Wealth of Common Sense recently took a look at the outperformance of US equities vs European equities since the financial crisis.  I found his analysis intriguing as it touches on the key question of whether or not European equities, - currently by some measures extremely discounted relative to the US on a valuation basis, - will play catch up with their American counterparts. Read More