Off Topic: John Cleese – managing your staff Friday, January 16, 2009
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Always entertaining:
Enjoy!
Madoff in a bulletproof vest Thursday, January 15, 2009
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It looks like Mr. Madoff is not taking any chances and decided to invest in a bulletproof vest:
All in all, it seems like a pretty wise decision considering scale of his ponzi scheme. This whole thing still baffles us… and we’re pretty sure someone is already working on the movie script!
Thought of the Day Wednesday, January 14, 2009
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We’ve had a couple of readers writing to ask when we will get back to talking about stocks in detail and highlighting interesting value plays. Nothing to fear, we will continue to do this! However, the truth is, we are not finding too many interesting opportunities… probably also due to our negative market sentiment.
It is important not to forget about the market and investing opportunities but we also feel that the overall economic climate cannot be ignored. As we have stated repeatedly – and as Warren Buffett says – one has to be greedy when others are fearful but this does not mean rushing blindly to buy any stock.
We continue to scout the market for interesting opportunities and keep up with a number of companies we have on our watch list but currently, we prefer to stay on the sidelines and wait for a clearer picture of the ramifications of recent events…
Adolf Merckle: another victim Tuesday, January 13, 2009
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This is another tragic side of what has been happening in the markets and unfortunately, not the first suicide…
Apparently, the main issue was the short trade on VW shares that went wrong ( he lost over 400 million)… which makes us wonder why he continued to take enormous risks with speculative positions considering all he had achieved and his net worth?
Not exactly the same thing but it brings to mind the saying that ‘leverage’ is how smart people go broke…
Becky Quick on David Letterman Friday, January 9, 2009
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In case anyone wanted to see this:
Enjoy!
SAFT: moving along nicely Thursday, January 8, 2009
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As our regular readers know, we are not in the buying mood but we wanted to post this interesting chart of Safety Insurance (SAFT). Despite being a terrible year for the markets, it seems that SAFT hasn’t done too bad…we have written about this company in the past, hence the update.
In the following graph, we compare the one year performance vs. the total market (using the VTI etf) and small caps (using the VBR etf) as benchmarks.
As you can see, SAFT has massively over performed both benchmarks and has quietly continued with business. In a nutshell, it’s a small regional insurance company with no debt, a steady dividend yield (above 4%), price close to book value and all in all, a relatively conservative stock.
Some of our post on SAFT:
- Our initial post on SAFT: here
- One of our updates: here
- Entering the market: here
Marc Faber’s 2009 Outlook Tuesday, January 6, 2009
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Marc Faber outlines his view of the current situation which he calls ‘the beginning of the worst economic contraction since the great depression’ and a global recession that will last between 5 and 10 years.
Mr. Faber is known for his pessimistic views but the interview is quite interesting…
Enjoy!
2009 Outlook Monday, January 5, 2009
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As discussed in our previous post, we are still of the opinion that 2009 will be a volatile year as things settle and as the markets try and pave the way for a recovery. Again, we feel 2009 will be a very difficult year for the real economy as the world will continue to slip deeper into recession.
In terms of investing opportunities, this will probably mean that:
- defensive equities will remain the favored investment
- high quality corporate bonds will warrant the risk of default
- emerging markets and commodities will continue to be very vulnerable and volatile
Two sectors that will likely remain weak for most of the year but that we keep on following are Real Estate and Private Equity. Both sectors will continue to suffer in the current economic crisis and higher financing cost will continue to eat into their earning and punish them.
However, having said this, we feel that the 2008 bottoms , when retested, could be an interesting occasion to reconsider selected opportunities. Both industries have been punished as a whole without much consideration for the few solid players that are going to come out of this crisis incredible strong… the Enterprising Investor will keep on following these sectors and find the right opportunities.
Please read our disclaimer.
Investing in 2009 Friday, January 2, 2009
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Many feel that we saw the worst of it in 2008 and that 2009 will be better but we somehow feel uneasy about this confidence…
We are still of the opinion that 2009 will be a volatile year as things settle and as the markets try and pave the way for a recovery. If 2008 was a year filled with horrible financial news, we think that 2009 will be a year filled with horrible economic news – the pain and suffering will shift to the real economy.
How are investors supposed to deal with this and how should they tackle their investments in 2009? Well, as we having be saying, with extreme prudence. We are not sure about the timing but we are fairly confident that we will see the markets rally and fall 20-30% but have no idea on what the sequence will be!
In the midst of all this uncertainty the need to have a long-term plan and a well balanced portfolio is crucial. Naturally, all depends on your own objectives and financial condition but this could really be the time to pick-up some bargain stocks and construct the portfolio of a lifetime! Be sure to have your shopping list ready and use what will probably be violent market swings to open positions not only in tradition value blue chip companies but also in small caps, gaining exposure to emerging markets and commodities. Remember, you need to have a plan and be ready to execute your planned strategy without fearing market moods – just stick to your plan!
More on this in the coming days…
Off Topic: Robin Williams on Jay Leno Friday, January 2, 2009
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Here is your weekly moment of humor… Mr. Williams on Obama, Bush, Hillary and more…
Enjoy!
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