Employment-to-Pop and CAPE Updates

Readers know there are two statistics that have caused me to worry for the past few years about the health of the economy and the market.

The first statistic is a macroeconomic indicator called the Employment-to-Population Ratio (E/Pop, to distinguish it from E/P or earnings yield). I prefer E/Pop to all other employment-health indicators because, unlike the unemployment and labor force participation rates, it takes the least amount of manipulation… Continue reading

Share
Posted in Uncategorized | Tagged , , , , , , , , , , , | Leave a comment

Natixis Sees a Lack of Realism in Individual Investor Expectations

Natixis published its fourth Global Survey of Individual Investors today. They reached 7,000 investors in 17 countries.

http://ngam.natixis.com/docs/265/1012/2015%20Individual%20Investor%20Survey%20white%20paper_FINAL,0.pdf

Many of the findings show that individuals are unrealistic and confused. Individual investors say they need 9.7% returns above inflation to meet their goals, which is higher than last year, although 84% said they would choose safety over performance, also higher than last year.… Continue reading

Share
Posted in Uncategorized | Tagged , , , , , , , , , , , | Leave a comment

Sam Zell Expects a Market Correction (Video)

Sam Zell was on Squawk Box this morning and warned of a correction. He repeated many of the themes that have been written here over the past few years, including the theme of Federal Reserve excesses leading to rising asset prices. It prompted me to go to Zell’s website, which listed quotes outlining his philosophy. I agreed with almost all of the quotes, but I was especially struck by one, because years ago… Continue reading

Share
Posted in Uncategorized | Tagged , , , , , , , , , , , , | Leave a comment

When Benjamin Graham Learned a Difficult Lesson

This comes courtesy of Frank Martin, CFA’s 2014 Annual Report to his clients. I had the pleasure of Skyping with Frank a few years ago.

“At the quarter-century mark of 1925, the great bull market was under way, and Graham, then 31, had enjoyed impressive success as an investor in the challenging years since 1915. During an early-1929 conversation with business associate Bernard Baruch… Continue reading

Share
Posted in Uncategorized | Tagged , , , , , , | Leave a comment

CFA South Florida’s Member-Promotion Video Release

I was happy to participate in this video production (make sure your YouTube settings are on HD for the best experience).

I have come to know the participants in the video as outstanding individuals, who volunteered their valuable time to promote the CFA Charter and the Members of the CFA Society of South Florida. The video is already being viewed in Charlottesville as an “inspiration” for… Continue reading

Share
Posted in Uncategorized | Tagged , , , , , , , , , , , , , , , , , , , , | Leave a comment

Profoundly Unpopular: Finding Bargains Among the Unloved or Unknown

Jason Zweig has produced another excellent column exposing truths that hide in plain sight. If you want to buy a dollar of free cash flow for less than one dollar, you are probably not going to find it among the companies that everyone wants to own. Instead, you will need to hold your nose and pick among the “profoundly unpopular” and hold on (or buy more) when they… Continue reading

Share
Posted in Uncategorized | Tagged , , , , , , , , | Leave a comment

The Market Return Histogram through 2014

The S&P 500 Index delivered a 13.69% return in 2014 as the market continued to reach new highs after reaching new highs in 2013. This year, for the first time, I have highlighted the years corresponding with the inflation and bursting of the DotCom bubble (grey) in addition to the Great Depression (yellow)… Continue reading

Share
Posted in Uncategorized | Tagged , , , , , , , , , , | Leave a comment

Is Your Adviser a Fiduciary?

Answer: Probably not, if your adviser is a broker (AKA a “Financial Consultant” or “Financial Adviser” employed by a brokerage firm).

“Brokers, like those at the Toffels’ bank, are technically known as registered representatives. They are required only to recommend “suitable” investments based on an investor’s personal situation — their age, investment goals, time horizon and appetite for risk, among other things. “Suitable” may sound like… Continue reading

Share
Posted in Uncategorized | Tagged , , , , , , , , , , , | 2 Comments

Truly Honored by Jason Zweig’s Selection of this Blog

I am truly honored to have been selected by Jason Zweig of the Wall Street Journal as one of a handful of investors that Jason thinks are “Smart People for Investors to Follow.” This Margin of Safety blog can be found on Jason’s list between Warren Buffett’s Letters and Memos from Howard Marks, so I have good reason to feel honored.

Readers of my blog know… Continue reading

Share
Posted in Uncategorized | Tagged , , , , , , , , , , | 2 Comments

B. Malkiel Cannot Believe His Own Eyes

“Over the past 100 years the returns from smaller companies have exceeded those of larger companies. It is also true that stocks with low valuations (i.e. lower prices relative to earnings and book values) have generated better returns than those with high valuations. What is less certain is whether these tendencies will continue in the future…”

–Burton G… Continue reading

Share
Posted in Uncategorized | Tagged , , , , , , , , , , | Leave a comment