Several of the Grey Swans Itemized in February 2012 Have Materialized in the Last Twelve Months

http://amarginofsafety.com/2012/02/24/a-herd-of-grey-swans/

Check out:

#5: Unrest as Iran develops a nuclear weapon (almost there);

#6: A Chinese economic implosion;

#8: Public sector retirement default (Puerto Rico is closing in);

#9: Significant unrest in the Muslim world due to US withdrawal (Benghazi, ISIS, etc.); and (drumroll)

#10: Something unexpected from North Korea;

No one can predict the future (though some believe they can). The best… Continue reading

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Rare Video of Peter Cundill Lecture from 2005

I read Russo-Gill’s book on Peter Cundill–There is Always Something to Do– soon after it was published in 2011, but not the Routines and Orgies book on the same subject.

BeyondProxy linked to this rare footage of Cundill speaking of his investment philosophy (Value) and approach to capturing the value premium. Peter, a Canadian, found that no matter what was happening in… Continue reading

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Relationship Between Stock Returns and Interest Rate Movements

I try to find evidence that refutes my theses on expected market returns to avoid behavioral traps. This graph from JP Morgan Asset Management’s research team offers some optimism for equities for rolling two-year periods if the Fed starts to raise while 10-Year Treasury yields are still below 5%. But, the shape of this historical curve is due to conditions that might not exist now. Rates are usually low when… Continue reading

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Market Overvaluation: It’s Not Just the CAPE

After my last post, I saw a blog post on another value investing site that criticized the type of CAPE analysis that I presented last week to indicate the market was overvalued.

The author of that post suggests that the CAPE is useless for comparisons since FAS 157 changed accounting for fair value. A review of other posts recently made by the author indicate… Continue reading

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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

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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

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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

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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

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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

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