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  • JUDS1234567 5 years ago


  • JUDS1234567 5 years ago

    People to follow/check up on 07/17/2012 Faber: Next crash before 2014 From Paul B. Farrell’s July 17 column highlighting forecasts from Marc Faber on CNBC: “American elections are unlikely to solve the economy’s core jobs problem, no matter who wins in November. So when comes the change? ‘Down the line.’ ‘The breaking point could be three, four, five years away. The world is heading toward a major crisis.’ OK, he hedges his bet on timing. But he’s very clear on how and why: The collapse will be ’caused by Federal Reserve Chairman Ben Bernanke and the Federal Reserve’s continuous printing of new money.’ The ‘bailout and money printing’ since the 2008 Wall Street Crash did not ‘create any long-lasting wealth or create healthy growth.’ Nor will the next president. So investors must hedge longer-term bets.” 07/16/2012 From Chris Martenson’s July 14 interview with James Howard Kunstler, author of Too Much Magic: “We are discovering more and more that the world is comprehensively broke in every sphere, and in every dimension and in every way. The governments in every level are all broke, the households are going broke, the banks are insolvent, the money really is not there. And the pretense that the money is there has been kept going simply with accounting fraud. And accounting fraud really accounts for most of the so-called ‘innovation’ that we chatter incessantly about — this is at the heart of Too Much Magic and the wishful thinking about technology. We are so intoxicated with this idea that we can create new and wonderful things. And we have absolutely no sense that the new and wonderful things that we created in the money system are destroying the money system. . . . It seems to me that the whole capital issue is going to accelerate hugely over the summer. I really do not see how the Europeans can get out of the box they are in — it really does not look like they are going to be able to form a European fiscal union. And it really does not look like the Germans are going to be willing to print money into a hyperinflation. And so I think that the disappearance of money is going to accelerate, and it is going to be all getting sucked into a black hole over the next six months. And that is going to be the beginning of a broad-based social awareness of the nature of this problem.” 06/18/2012 PIMCO’s Bill Gross wrote on Twitter yesterday that the US is “approaching recession when measured by employment, retail sales, investment, and corporate profits.” Except for those categories, all is well. 06/12/2012 Bolstering our 500 at 500 forecast, Jamil Baz of GLG Partners wrote in yesterday’s FT: “One would have thought that the recent deleveraging caused debt ratios to collapse. Yet, after the financial maelstrom of the past five years, debt ballooned to a weighted average of 417 pct of gross domestic product from 381 pct in June 2007 in the 11 economies most under the market microscope. Strikingly, in each of Canada, Germany, Greece, France, Ireland, Italy, Japan, Spain, Portugal, the UK and the US, the ratio of total (public and private) debt to gross domestic product is now higher than it was in 2007. . . . As deleveraging has not even started yet, the crisis of the world economy has not begun either. All the perceived unpleasantness of the past few years is merely a warm-up act for the greater crisis still to come. The need to get debt levels down is as pronounced as ever in the eurozone, particularly in southern Europe, but also in the US and Japan. . . . It will take a minimum of 15 years or so for the economy to reach escape velocity and attain a level consistent with healthy growth scenarios. This is because debt levels need to come down by at least 150 per cent of GDP in most countries. History suggests you cannot reduce debt by more than 10 percentage points a year without unleashing major social and political dislocation.” Cardiff Gets Cautious April 17, 2012 Gray Emerson Cardiff’s Sound Advice was one of the first letters to go bullish after 2008, calling the era “a new Supercycle.” Here’s what he thinks now: “All good things must come to an end. . . . Our Diffusion Index of Lagging Indicators has risen to 100 pct, telling us to start being more careful. . . . There is no reason to panic. The economy has improved but still has plenty of headroom. Europe is still an undermining factor and China is slowing down. Slack in the economy means the Federal Reserve will continue its accommodative monetary policy. . . . We are not recommending that you sell everything and go into cash. . . . As long as the Federal Reserve maintains its easy monetary stance, the major trend of the market will be up. However, upward pressure on bond yields always makes for a more nervous market, and there will be air-pockets and downdrafts. So we need to be more careful and discerning about our investment selections.” Among stocks he’s selling is our own Transocean (RIG). We, however, are looking to buy more below $45. 04/12/2012 Gary shilling is still bearish has been for a whilte, calls for a market drop of 40% “Gary Shilling is still bearish, expecting S

  • JUDS1234567 5 years ago

    How to pick stocks like warren buffet • Most of the Time growth in intrinsic value=growth in book value We also observed that most of our stocks (ABT, KO) peaked at about 50X earnings at secular tops • Investors should never pay prices higher than justified by long term growth rate, and thus opportunities may exist if stocks PE drops below presumed growth rate • Where buffet differed from Graham, was in insisting that price be linked to growth and quality. You must buy established growth companies, CAPABLE of growing faster than the market, BUT AT REDUCED PRICES(Pg 55) • Diversification is the bane of high returns • As you can see, it was possible to enhance your returns beyond what the DOW index provided simply by buying ay yearly low • On outperformance “The rest are usually living off a few stocks that luckily delivered tremendous returns and kept entire portfolio ahead of the market for years, a fund manager who obtained 80% 1 year return can live off that one period for several more years, even if his performance lags in subsequent years, the 80% one timer us usually enough to keep the portfolio above the DOW or SP500 for several years (Pg 59). • A well rounded portfolio consisting of 8-12 companies bought at reduced prices and offering strong growth potential should lead to superior returns (Pg 60). ______________________________________________________________________________ John Neff’s secret • He emphasized dividend paying stocks, in his fund dividends accounted for 40% of return of yearly gains, he realized that if he could find stocks sporting dividend yields of 4-5% than half his work was done • To summarize- Enhancing returns easily: 1. Buy low 2.Concentrated (8-15) 3.Reduced costs (taxes, fees) 4. Reinvest Dividends • Buffet again mentions the 15% annual rates “keep your earnings rising t 15% annual rates and the stock will continue to rise over time” • You should only swing(invest) where there is the highest probability of success-made up of 1 .Quality of company 2.Holding period 3.Atractively priced (Pg96) • Buy a growth stock at an attractively low price with the intention of holding the stock indefinitely and your chances of making money are excellent-however • NO ERATIC GROWTH HISTORY! Buffets Approach 1. Wait, indefinitely if needed (Pg 96-97 has some good examples) 2. He identifies all stocks he wishes to own over the next several years at the right price 3. Reappraise growth prospects, price may be too high, remember that nothing increases your odds better than latching onto good growth stock at a reasonable price Valuing a business (Pg 109) • Company must be predicable(AMEX,KO, GIL,WFC) this puts all companies on equal footing, 99% of all business are not created equal not all business are consistent Railroad, software • “Your goal as an investor should be simply to purchase at a rational price, a part interest in an easily understandable business, whose earnings are virtually certain to be materially higher 5, 10,20 years from now. Over time you will find only a few companies that meet these standards “Buffet • When estimating future earnings, first look into the past, research has shown, that a company’s growth record is in most cases the most reliable predictor of its future course • “A company that has attained annual earnings growth of 15% in the past 25 years is not likely to post future results that deviate far from that level, that it could attain such growth streaks through recessions, wars, high inters rate environments, crashes is testaments to companies ability to sustain itself going forward KO,EMR,ADP,PM,MCD,WAG(have steady growth in yearly sales) • Buffet for the most part avoids cyclical (bc earnings fluctuate with business cycle) including oil, cars, BANKS, because they display no long term operating consistency. He only really buys them when stock is being mispriced in the market and there exist some catalyst to ensure a rise in price. Stocks like EK, Sears, GM, are today posting per share earnings that are not much higher than 1970s and thus share price has grown very little. Graham also recommended no one pay more than 16 x averages earning for a company. For example (pg 112) A company intrinsic value is inextricably linked to its operating consistency (Pg115) Pg115-117 valuation example Buffett is keenly aware that book value growth is probably the most important ingredient in rewarding shareholders over time THUS a high increase per share book value at high rates must also increase earnings at high rates, THEREFORE increase in book value over time=proportionate increase in intrinsic value and share price. In fact……there is strong correlation between book value growth and share price For example GM,USX little tangible increase in book value in last 35 years and opposite side CISCO PER SHARE BOOK VALUE increased at 92% annual rate over 1990s and share price did roughly the same • Value rises with retained earnings, and as such buffet views increase in book value as the key as whether management increased intrinsic value(the relevant measure of performance buffet believes, is the company growth in per share book value…if book value has grown at faster rate than the index we have done a good job). • Good way for us to compare our own investment Book value however can be manipulated: 1. Issuing Shares 2.Acqusition 3.Letting profits sit in bank, BUT ROE will drop • Buffett prefers book value to earnings and stock price *the KEY* is not final book value but growth rate of book value Pg 132 calculate CAGR of for book value T in 13 years EPS grew but Book value did not and restructuring charges be very weary of restructuring charges, are usually bad ROE It takes more than 25% growth to maintain a 25% ROE

  • JUDS1234567 5 years ago

    We estimate that Berkshire’s average leverage is about 1.6-to-1 and that it relies on unusually low-cost and stable sources of financing. Berkshire’s returns can thus largely be explained by the use of leverage combined with a focus on cheap, safe, quality stocks. If his Sharpe ratio is very good but not unachievably good, then how did Buffett become one of the most successful investors in the world? The answer is that Buffett has boosted his returns with leverage, and that he has stuck to a good strategy for a very long time period, surviving rough periods where others might have been forced into a fire sale or a career shift. We estimate that Buffett applies a leverage of about 1.6-to-1, boosting both his risk and excess return in that proportion Thus, his many accomplishments include having the conviction, wherewithal, and skill to operate with leverage and its risk over multiple decades. This leaves the key question: How does Buffett pick stocks to achieve a relatively attractive return stream that can be leveraged? We identify several features of his portfolio: He buys stocks that are “safe” (with low beta and low volatility), “cheap” (i.e., value stocks with low price-to-book ratios), and high-quality (meaning stocks that profitable, stable, growing, and with high payout ratios) Stocks with these characteristics – low risk, cheap, and high quality – tend to perform well in general, not just the ones that Buffett buys. In other words, accounting for the general tendency of high-quality, safe, and cheap stocks to outperform can explain much of Buffett’s performance and controlling for these factors makes Buffett’s alpha statistically insignificant Buffett’s genius thus appears to be at least partly in recognizing early on, implicitly or explicitly, that these factors work, applying leverage without ever having to fire sale, and sticking to his principles In summary, we find that Buffett has developed a unique access to leverage that he has invested in safe, high-quality, cheap stocks and that these key characteristics can largely explain his impressive performance. Berkshire’s positive loading therefore reflects a tendency of buying stocks that are cheap in the sense of having a high book value relative to their market value. Our innovation is to also control for the Betting Against Beta (BAB) factor of Frazzini and Pedersen (2010) as well as the quality factor (QMJ, “quality minus junk”) of Asness, Frazzini, and Pedersen (2012b). A loading on the BAB factor reflects a tendency to buy safe (i.e., low-beta) stocks while shying away from risky (i.e., high-beta) stocks. Similarly, a loading on the quality QMJ factor reflects a tendency to buy high-quality companies, that is, companies that are profitable, growing, and paying out dividends (see Asness, Frazzini, and Pedersen (2012b) for details). We see that Berkshire loads significantly on the BAB and QMJ factors, reflecting that Buffett likes to buy safe, high-quality stocks Thus, a significant part of the secret behind Buffett’s success is the fact that he buys safe, high-quality, value stocks While Buffett is known as the ultimate value investor, we find that his focus on safe quality stocks may in fact be at least as important to his performance. Our statistical finding is consistent with Buffett’s own words: I could give you other personal examples of “bargain-purchase” folly but I'm sure you get the picture: It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price. – [url=]Warren Buffett[/url], Berkshire Hathaway Inc., Annual Report, 1989. It is nevertheless interesting to discover the importance of leveraging low-beta, high-quality stocks for the person known as the “ultimate value investor.” In summary, if one had applied leverage to a portfolio of safe, high-quality, value stocks consistently over this time period, then one would have achieved a remarkable return, as did Buffett. In essence, we find that the secret to Buffett’s success is his preference for cheap, safe, high-quality stocks combined with his consistent use of leverage to magnify returns while surviving the inevitable large absolute and relative drawdown’s this entails. Indeed, we find that stocks with the characteristics favored by Buffett have done well in general, that Buffett applies about 1.6-to-1 leverage financed partly using insurance float with a low financing rate, and that leveraging safe stocks can largely explain Buffett’s performance.

  • JUDS1234567 5 years ago

    In contrast to predicting the impossibly diffi cult real world, predicting market outcomes is relatively straightforward. Profi t margins and P/E ratios always seem to pass through fair value if, and it’s a big if, you can just be patient enough. It’s an awfully normal world we inhabit, in the long term. It’s only the short-term zigs and zags that drive us all crazy, and right now we should brace ourselves for some very odd and unpredictable short-term market effects brought on by the recent crisis and the massive governmental response. I thought last April that the market (S

  • JUDS1234567 5 years ago

    A resume is essential for people that are searching for, and applying for different positions. A resume is not just a piece of paper about you. Rather, it is a document that you use to create a “brand” for yourself and your own name and reputation. You use a resume, along with a cover letter to give potential employers details about who you are and what your background is like. Making and submitting a resume is the first step on the ladder to a successful career. However, most people tend to focus on the last step, (getting a job) more than the first one. It is also important to seek out particular places of employment. Many people think they want to just work anywhere as long as there is a position open. If you are not truly happy, then you will have to start over again from scratch. Think about this when creating your resume. While many of us only emphasize on what should be included on a resume, there are wise people who also give importance to what doesn’t belong. If you make it too long and full of unnecessary clutter, then no one will want to read it. Let’s explore the top 10 things that you should put on your resume. Avoid a crazy, overconfident and unrealistic objective. Do not try to portray yourself as the next [url=]Bill Gates[/url]. Keep your statement simple and realistic. If it doesn’t make sense to you, then it won’t make sense to the employer. An arrogant and impractical objective statement will not create a good impression upon employers. You should not include your previous job experiences that are irrelevant to the nature or field of job you are applying for. Remember to include only what they need to see. This is where you get rid of that unnecessary clutter.Please don’t write about experiences that do not match the required job description. Never put achievements that are achievements just according to you. Although everyone has slightly different views of achievement, you should avoid including those achievements in your resume that are not related to your professional field. For example, winning some eating competition is something that must not be included in your resume. Avoid over displaying your physical characteristics: Employers hiring you are not interested in knowing how muscular you are or how many abs you have, so never define yourself that way. However, letting them know what activities you are involved in is o.k., but only on your cover letter. Never put strange hobbies: Don’t include hobbies that would make someone cringe when reading your resume. Avoid strange and irrelevant hobbies like knitting sweaters for pets. Try to include generic and less detailed hobbies like playing tennis, reading, and social work. Avoid private matters to show in your resume. Avoid any religious affiliations, political orientations, sex orientation, and marital status. Do not use highly sophisticated and obscure words: Be simple in your sentence structure, tone, grammar and vocabulary. Avoid big words to impress others, and always be natural and genuine. Do not write unprofessional contact details: Many people tend to write email I.D.’s that seem strange; for example, Never put this kind of contact information. Your email I.D and entire contact information must seem professional. If necessary, create a new, professional sounding email account. Avoid fancy formatting: Keep your resume as simple as possible. Never use different fonts, colors, designing, and borders in your resume. Keep it simple, easy to read, and refreshing. Avoid personal details: Do not put your social security number down or even your bank account details. Eventually, this is completed during the hiring process.

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