Tom Gardner interviews Philip Durrell

self-serving but interesting nonetheless

Five Simple Rules for Value Investors

Well, maybe four.

Thoughts for Phil Carret

Another giant of investing, though less well known, is Phil Carret. Carret started Pioneer, one of the first mutual funds, in 1928. His average annual return, calculated from 1928 to 1974, is estimated to be a solid, market-beating 14%. (That's enough to increase an investment's value 50-fold over 30 years.) Carret died in 1998 at the age of 101, but he left behind many thoughts on how to invest successfully.

Investing and Fantasy Football

Investment lessons from playing fantasy football

A Value Screen

Joseph Piotroski has devised a screen that has beaten the market by 7.5% over a 21-year period.

It chooses companies with low price-to-book value that are profitable, declining debt, and improving operational efficiency.

I suppose it makes sense, but it differs a bit from the kind of stocks that I look for. I don't worry about declining debt. If the debt is already zero, how can it decline? Improving efficiency is obviously good. But I'm satisfied if a company can sustain a steady level of efficiency year after year.

focusing on portfolio management

Whitney Tilson claims "the overwhelming majority of great investors that I'm aware of practice "focus investing".

Focus investing means buy infrequently, but buy big. On the other hand, a big hit to one stock in a focused portfolio will have a big impact. In that case, one should diversify. Russ Towne comments further in his blog.

Buffett on National Public Radio

audio presentations

What's Your Investment Strategy?

It may help you if you can write down your investment strategy.

http://tinyurl.com/6j4ln

Pigs of the Dow

This year's Pigs of the Dow.

Merck at minus 30.4%
Intel at minus 27.0%
General Motors at minus 25.0%
Pfizer (NYSE: PFE) at minus 23.9%
Coca-Cola (NYSE: KO) at minus 17.9%

http://tinyurl.com/3nt3f

Mauldin's 2005 forecast

The economy is going to be good, so I don't think we see the start (yet) of the next major bear leg, although this year will mark the high for what I think will be many years. This will be a frustrating year for stock market investors. You can always do well if you are a good individual stock picker, but broad indexes and mutual funds are not the place to be. The market is a sideways to down market, with the risk to the downside as we get toward the end of the year and a possible recession on the horizon in 2006.

And not to put too fine a point on it, I still think we are in a long term secular bear market. In a few years, we will look back and realize this was a bear trap - another sucker rally.

http://www.investorsinsight.com/article.asp?id=jm010705


What did he say last year?

This is a momentum market. The best way I can summarize my views is to tell you of a bet I made today. It is a small amount, to be sure, but ego is on the line. Let me emphasize this is a guess. I have no "model" or crystal ball.

If you add the closing year end numbers of the S&P 500 and NASDAQ together, I took the under for the year. That means I think the combined price of the indexes will decline. If the S&P 500 does indeed rise, I expect the NASDAQ to fall more. I would also take the over for May, as a further rally may be in the future. I think a continuation of this rally is quite possible, as earnings should do well, and investors seem to be happy with the short-term. But the upside does not seem to me to be all that great. I would buy value and yield and have a trailing stop loss. How close would depend upon your own particular circumstance.

It might be more helpful to give you the opinion of Richard Bernstein, the Chief Strategist for Merril Lynch, who sees the S&P 500 at 1010 at the end of the year. The technical analysts at UBS see a first half rally and a second half decline.

The S&P closed 2004 at 1211.92 after closing 2003 at 1111.92. Exactly 100 points!

The Nasdaq closed 2004 at 2175.44 after closing 2003 at 2003.37.

http://www.2000wave.com/article.asp?id=mwo010904

wildly overpriced stocks

Should you actually stay away from wildly overpriced stocks?

According to Jeremy Siegel, if you'd invested $1,000 in 1957 in the 100 stocks in the S&P with the highest price-to-earnings ratios, and rebalanced annually, you'd have had $56,700 by 2003; if you'd bought the 100 stocks with the lowest P/Es, you'd have had $425,700. [The S&P 500 index was created in 1957.]

[this article also appeared in the December 2004 issue of Money magazine]