Enterprising Investor Forum

George Soros… Wednesday, November 11, 2009

“Economic history is a never-ending series of episodes based on falsehoods and lies, not truths. It represents the path to big money. The object is to recognize the trend whose premise is false, ride that trend, and step off before it is discredited…” > Not really Value Investing but a great quote!

Bruce Berkowitz Performs Monday, June 1, 2009

His track record speaks for itself and it is always a treat to listen to his thoughts.

Having averaged double digit growth since inception, he is not only scooping up great value plays but also senior credit in selected companies that will easily allow him to continue with the stellar performance:

As usual, words of wisdom and worth taking notes!

Jim Rogers: Markets Yet To Bottom Monday, May 25, 2009

Following on from our previous post:

Enjoy!

Meredith Whitney – don’t own banks Wednesday, May 13, 2009

She’s back and she keeps on making the right calls on banks. She warned us at the beginning, then she told us that they were oversold and now she is telling investors to keep their eyes open:

Bottom line, she would not want to own bank stocks!

Enjoy!

George Soros – For the Record Tuesday, April 21, 2009

Here is a discussion with Soros on his investment fund, coming out of semi-retirement in 2007 and how he had to actively manage his investments and  shift strategies in order to come out with a profit.

Soros, who is one of the ultimate global marco investors is always worth listening to.  He is still worried about the risk of a deeper contraction if the system falls apart.

He stresses the importance of a global and co-ordinated approach to tackle this crisis. He then goes on to talk about the beginning of what he calls ‘financial protectionism’… and how it will be very important for the stronger countries to not only worry about themselves but make sure they help the weaker ones in order to guarantee the global co-ordinate approach and avoid a much deeper melt-down.

He then discusses about the outlook for Brazil, India and China where he thinks the time to invest is approaching but he is still in no hurry in looking at Russia again….

In fine, he talk about his theory of reflexivity.

Corporate Credit Wednesday, April 15, 2009

Despite a lot of suffering in the past years, Corporate Credit is starting to look attractive.  Most market commentators have been talking about this and that it is time to pick up some bargains with pretty good yields. However, as usual, the key question is how to do this and minimize risk exposure?

As most of our readers know, we still feel that we are probably only halfway out of the tunnel and that is why we would prefer to gain exposure through an ETF. One option could be the iShares iBoxx $ Invest Grade Corp Bond (LQD).

The important thing is to focus on Investment Grade companies and to make sure you have a margin of safety as, even the best companies, are being downgraded in this uncertain market environment. In any case, even though default risk is there also for these companies, the default rate on >BBB/Baa is quite low… currently around 5%. Therefore, there should be some room for exposure to this segment in most portfolios.

Fund summary from Yahoo!Finance:

The investment seeks investment results that correspond generally to the price and yield performance of a segment of the U.S. investment-grade corporate bond market as defined by the iBoxx $ Liquid Investment-Grade index. The fund typically invests at least 90% of assets in the bonds of the underlying index, and at least 95% of assets in investment grade corporate bonds. It may also invest in bonds not included in the underlying index. The fund may also invest up to 5% of assets in repurchase agreements collateralized by U.S. government obligations, and in cash and cash equivalents. It is nondiversified.

Please read our disclaimer.

Economic Cycle Clock Friday, April 3, 2009

We were discussing this with one of our readers and thought that it might be a good idea to post it for the benefit of all:

Bull or Bear Rally? Tuesday, March 24, 2009

After another 7.1% gain in the S&P yesterday, it looks like the markets may be ready for a little pause. But the big question is if we have indeed reached the bottom or if this is just a bear market rally?

Even though the market actually broke above its 50-day moving average, we are still struggling to understand all this optimism.. we may be wrong but we can’t help the feeling that this is just a speculative push to the 850 area and that we will then have to wake up and smell the coffee, probably whilst looking at an S&P back below the 600 level.

There are too many unanswered questions on the current situation and on the way forwards for the bulls to solidly take control here and if they do, we feel that, it would be sad proof that we haven’t learned anything from these past years….

Take your time… Friday, March 13, 2009

As someone just said on CNBC, no one becomes rich by buying on the 4th up day! Despite the fact that it looks like some risk appetite is returning to the market, the Enterprising Investor should have already made his purchases (if the analysis justified to do so), not dive in now!

Most of the buying so far has been due to short covering and most of the fundamental issues affecting the economy and financial markets have not changed this week. Are some of the banks all of a sudden worth almost double the price they were trading for last Friday? Is there less risk? Do we have more clarity on their balance sheets and their exposures? Hmmm…

Keep on doing your homework but we are extremely skeptical of all those market commentators that are saying to get back in and that the time has come to put money back in the markets. We are still adopting a wait and see attitude and would ideally be ready to take some positions we like but unless something fundamental changes in the state of the economy, we are looking to do so at or below 52-week lows.

Have a nice weekend!

Value in Commodities Wednesday, January 28, 2009

Rest assured that the commodity boom is not over, we believe that prices will probably start to pick up again in late 2009, most probably coinciding with the start of a long and difficult economic recovery process.

As we all know, the sharp decline has been quite spectacular – notice the July 2008 peak – as you can see hereafter in the 2 year DB Commodity Index ETF (DBC):

It is no surprise that in the current economic climate, demand has softened significantly but this does not mean that we will never see growth again! Demand will remain under pressure but not indefinitely.

The next months will be very important to try and understand what shape this recovery could take but in any case, the Value Investor should closely monitor developments in the overall commodity spectrum.