Thread: Rules for Investors with UNG and GLD

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  1. #1

    Default December 16, 2013 ? Quote of the Day

    ?The rule of thumb is to do your homework, do your analysis, don?t give up prudent risk management for the sake of certain fads. Look for real valuations, and stay true to your time frames,? saidMarc Chandler, the global head of currency strategy at Brown Brothers Harriman.



    go to the Mad Hedge Fund Trader's website
  2. #2

    Default Simplicity ain?t easy

    Last year I was taken with a documentary and wrote a post about the so-called ?best sushi chef in the world.? Jiro Dreams of Sushi for me had a great deal to say about the relentless pursuit of perfection. This has implications for any number of fields, trading and investing included. Now there is an update to the story.
    Pete Wells in the NYTimes recently gave a four-star review of, Sushi Nakazawa in the West Village, which is run by a former apprentice of Jiro. Now there is a short form video with the owner and chef at Sushi Nakzawa.

    Source: NYTimes

    Two really interesting ideas come from this story. The first is that the world is really small. A couple of messages got this new venture on its feet. Second it shows that simplicity is the result of dozens of iterations. Whether it is sushi, an app that just works or the iPhone that went through dozens of iterations before coming to market, elegance is not easily earned.

    One thing experienced traders recognize that the more steps you can strip away from your process the easier it is to replicate over time. Novice traders need to recognize that this knowledge is gained over time through experience and market tuition. Overly complicated systems are by definition more fragile and more prone to behavioral pitfalls.

    That is why for most investors a simple approach that focuses on broadly diversified portfolios of index funds, periodically rebalanced is a simple approach that can be followed over time. For traders and investors in pursuit of alpha the idea of simplicity should also be something to strive for. Simplicity ain?t easy. But what exactly is the alternative?



    The post Simplicity ain?t easy appeared first on Abnormal Returns.


    Abnormal Returns
  3. #3

    Default re: Global Expansion

    via Eric Peters at wkndnotes:

    ?You know next yr will be the 1st since 2003 that Japanese and Chinese stocks both post double-digit gains?? asked the same Asian CIO. Both mkts are cheap, Chinese reform and Abenomic stars are aligning. Plus, the US fiscal drag is lifting, and Europe won?t contract. Then we discussed the deflationary consequences of the technological revolution rippling across the globe. The resulting low interest rates, rising corporate margins. And he asked, ?In that world, isn?t the right P/E for the S&P 20??

    Josh here ? If we?re going to muddle through again in 2014, with more slow economic growth and borderline deflationary employment and wage conditions, the S&P 500 is likely fully priced.

    But what if we?re not just going to muddle through?

    What if something bigger is happening?

    Worth considering.
  4. #4

    Default BlackRock: 3 Reasons for a Global Dividend Growth Strategy

    US stocks crushed the global equity markets this year and this kind of radical outperformance can frequently lead to investors abandoning their diversified strategies to run away and join the circus. I regard this as a bad idea, driven by images in the rear view mirror. See Why Bother?? Will investors take the wrong lessons from 2013? and my mention in this weekend?s Barron?s for more on this concept.

    So what is the case for international stocks? Well, they?re cheaper and they?re apt to pay out a lot of their earnings in dividends each year ? and to grow those yields consistently thanks to local government taxation policies that discourage retained earnings in many cases.

    Last month, BlackRock took a deep-dive into world dividend growers ? stocks that are not only paying dividends now but that have to the potential to grow their payouts into the future.

    They give us a few reasons to consider adding a world dividend growth equity strategy to our portfolios, here are the three I find to be most interesting:

    1. World dividend stocks can do well in a rising rate environment:
  5. #5

    Default Sunday links: flipping a switch

    ?Tis the season. In a world full of noise, a great gift is noise-cancelling headphones. The Wirecutter recommends the Bose QC20 Acoustic Noise Cancelling Headphones for the in-ear crowd.

    Quote of the day

    Monish Pabrai, ?When we look to make an investment, the greed part of the brain is turned on?A checklist is like a circuit breaker that helps prevent the brain from being able to flip that switch.? (WSJ)

    Chart of the day
  6. #6

    Default Top clicks this week on Abnormal Returns

    Thanks for checking in with us this weekend. Here are the items our readers clicked most frequently on Abnormal Returns for the week ended Saturday, December 14th, 2013. The description reads as it does in the relevant linkfest:

    A good list of 15 financial sites and apps. (CNNMoney)
    Three bearish charts. (Pragmatic Capitalism)
    The Value Line Median Appreciation Potential is at historic lows. (Mark Hulbert)
    Why Warren Buffett?s bet against hedge funds is working out. (Rekenthaler Report)
    Jeff Gundlach is in no hurry to buy mortgage REITs. (Income Investing)
    How much in assets does a typical hedge fund need to break even? (WSJ)
    Nuts are a super food. (Well)
    Why do professor pitch buy-and-hold even though valuation measures work? (Morningstar)
    On the downfall of John Taylor?s FX Concepts hedge fund. (aiCIO)
    A dozen things learned from Jason Zweig on investing. (25iq)


    What other stuff you may have missed on the site this week:

    Beware backtests built to anchor expectations. (Abnormal Returns)


    Thanks for checking in with Abnormal Returns. You can follow us on StockTwits and Twitter.
  7. #7

    Default Q4 Earnings Guidance Deteriorates by One Third

    At the end of Q3 on September 30th, consensus estimates for S&P 500 earnings growth in Q4 stood at 9.5%. It is down by 1/3rd since then to just 6.5% ? and falling.

    The bears will point to this latest data point from FactSet Research and say ?Told ya so!?

    The bulls will say ?Big deal, this trend has been happening all year ? Beat-and-Lower is the best strategy for corporate management, why would they stop? David Einhorn flagged the beat-and-lower game over the summer, it?s pretty well-understood at this point (see David Einhorn: The New Game is ?Beat and Lower?)

    Anyway, here?s FactSet (emphasis daddy?s):

    The estimated earnings growth rate for the S&P 500 for Q4 2013 is 6.5% this week, unchanged from last week?s growth rate of 6.5%. On September 30, the Q4 earnings growth rate for the index was 9.5%. All ten sectors have witnessed a decline in earnings growth rates since that date, led by the Energy sector.

    Part of the reason for the drop in expected earnings growth is the high percentage of negative guidance issued by S&P 500 companies for Q4. Overall, 94 companies have issued negative EPS guidance for Q4 2013, while 12 companies have issued positive EPS guidance. Thus, 89% of the companies in the index that have issued EPS guidance have issued negative guidance. This percentage is well above the 5-year average of 63%.

    At the sector level, eight of the ten sectors are projected to report a year-over-year increase in earnings for the quarter, led by the Financials (24.9%), Industrials (14.2%), and Telecom Services (14.0%) sectors. The Energy sector is expected to see the lowest earnings growth rate (-7.2%).

    How much longer can beat-and-lower continue? How much lower can Q4′s estimates sink before reporting time circa late January before it erodes confidence in the stock market?

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