|New Threads Only:|
|New Threads & Replies:|
Forum List » Guru News and Commentaries|
Guru News, Stock picks and commentaries
Horizon Kinetics Third Quarter Commentary
Posted by: Holly LaFon (IP Logged)
Date: December 11, 2013 11:54AM
No one can accuse us, in these pages, of not being diligent in using our words, though we have been accused at times of using too many. So this review switches modalities somewhat, with more exhibits and fewer words. What won't switch are the themes, which are as relevant as ever: 1) the important and dysfunctional ways in which indexation is affecting security valuations, risk, and returns; and 2) the antithesis of indexation—active management and individual security selection, of which we, certainly, are practitioners.
Prices in the marketplace are made by the marginal, or last, buyers or sellers—it's not the 99%+ of Apple (AAPL)'s shareholders who determine its price, but the net buying or selling pressure of the fractional percent who are transacting on a given day. It's certainly not us: we've been accused of harboring really long-term holding periods—years and even decades. Granted, we inhabit one end of the spectrum. So, here are some recognizable benchmarks: the annual turnover rate for IBM (IBM)(the proportion of its outstanding shares traded each year) is about 83%; the figure for ExxonMobil (XOM) is 68%. The average mutual fund has 68% annual turnover.
Now, for two of the most popular exchange-traded funds (ETFs), the large-company SPDR S&P 500 Index ETF and the iShares Russell 2000 Index ETF, which is supposed to provide exposure to small company stocks, their annualized turnover, respectively, is 3,309% and 3,340%! Yes, I said 3,340%! The average holding period is measured in days.
Continue reading the commentary here.
Guru Discussed: Murray Stahl: Current Portfolio, Stock Picks
Stocks Discussed: AAPL, XOM, IBM,
Disclaimers: GuruFocus.com is not operated by a broker, a dealer, or a registered investment adviser. Under no circumstances does any information posted on GuruFocus.com represent a recommendation to buy or sell a security. The information on this site, and in its related newsletters, is not intended to be, nor does it constitute, investment advice or recommendations. The gurus may buy and sell securities before and after any particular article and report and information herein is published, with respect to the securities discussed in any article and report posted herein. In no event shall GuruFocus.com be liable to any member, guest or third party for any damages of any kind arising out of the use of any content or other material published or available on GuruFocus.com, or relating to the use of, or inability to use, GuruFocus.com or any content, including, without limitation, any investment losses, lost profits, lost opportunity, special, incidental, indirect, consequential or punitive damages. Past performance is a poor indicator of future performance. The information on this site, and in its related newsletters, is not intended to be, nor does it constitute, investment advice or recommendations. The information on this site is in no way guaranteed for completeness, accuracy or in any other way. The gurus listed in this website are not affiliated with GuruFocus.com, LLC. Stock quotes provided by InterActive Data. Fundamental company data provided by Morningstar, updated daily.