[9/19/07] Fools duel dividends vs. buybacks
[5/2/07] Studies found that the stocks of the companies that buy back 5-10% of their total shares on average gain 6.8% more than the companies that do not buy back shares. Dilutions from the increases in the number of shares outstanding result in poorer stock performance over long term.
[12/18/06] At well-run companies, buybacks benefit shareholders by increasing dividend growth potential. But a dollar spent on buying back shares is not the same as a dollar paid out in dividends. For those seeking income, buybacks are far less attractive than dividends.
[12/14/06] On a purely theoretical level, it shouldn't make a big difference whether or not a company pays dividends. If earnings are distributed to investors in the form of dividends, the recipients must choose how to reinvest those payments. Many investors participate in dividend reinvestment programs, which automatically use any dividends they receive to purchase additional shares of stock. On the other hand, if a company retains its earnings instead of paying a dividend, the value of the company should be higher by the amount of cash the company kept. The company can reinvest the money in its business operations or perform capital-structure transactions, such as paying down debt or repurchasing stock.
In reality, however, many investors prefer dividend-paying stocks, and many companies have responded to that preference by continuing to pay substantial dividends. Part of that preference may be simply because dividends represent real money, rather than an abstract paper value.
[12/5/06] Stock buybacks are huge.
Through the first nine months of this year, big U.S. corporations spent a record $325 billion snapping up some of their outstanding shares, according to Standard & Poor's. That's up 33% from the same time last year, and more than double the $130 billion spent on buybacks during the first nine months of 2004.
To put those figures in perspective, consider that total operating earnings for S&P 500 companies through the end of the third quarter was $590 billion. In other words, the biggest companies spent more than half their earnings power retiring their shares.
[12/3/06] Dueling Fools: dividends vs. buybacks
[9/29/06] Share repurchases can be great value creators for investors -- if done for the right reasons. But be careful, because some repurchases are undertaken just to offset option dilution.
[8/25/06] Standard & Poor's Corp. of New York is warning investors about distortions in corporate earnings due to high levels of treasury stock and cash held on balance sheets.
Yesterday, S&P announced that share buybacks in the second quarter had reached a record $116 billion for S&P 500 companies.
For 20% of these firms, the reduced number of shares outstanding caused a "significant boost to earnings-per-share" in the quarter, said Howard Silverblatt, S&P senior index analyst, in a statement.
Although helpful for per-share earnings, share buybacks combined with large amounts of interest-earning cash could cause problems in predicting results for many companies, the research firm said.
[8/20/06] Many Americans need to look for ways to curb their spending. Big U.S. companies have the opposite problem.
The piles of cash and stockpile of repurchased shares at these companies have hit record levels and continue to grow along with corporate earnings, creating challenges for the executives who must decide how to allocate all that capital.
While some investors carp about managers hoarding cash rather than building their businesses, data show companies have in fact been reinvesting in themselves. Some are also acquiring other companies, although these deals are often smaller in scope than the takeovers executed in the go-go late 1990s, as executives don't want to undertake expensive deals that could hamper investor returns for years to come.
The cash figures are also becoming so large that they are skewing some of the yardsticks used to gauge corporate performance. For example, with more companies seeing bigger portions of their bottom line accounted for by interest income, it becomes harder for Main Street investors to gauge how well some corporate managers are running core operations.
* * *
[7/30/06] The companies in the Standard & Poor's 500 index have reported 16 straight quarters of double-digit earnings growth. If upcoming reports show that this spectacular growth continued in the second quarter, earnings per share may be pushed into double digits not because of stellar performance, but thanks to share buybacks and higher interest rates.
Share buybacks have become a big-money endeavor. The cash-laden companies in the S&P 500 spent 45 percent of their capital expenditures on stock buybacks last year, which was especially significant because capital expenditures were on the upswing. Thanks to buybacks, the S&P 500 companies now hold 10 percent of their market value in company-owned stock, according to Howard Silverblatt, senior index analyst at S&P. Companies have never bought back this much stock before, Silverblatt said.
Sunday, July 30, 2006
Thursday, July 27, 2006
Peak Oil
[8/9/06: Mauldin writes about Peter Tertzakian's book A Thousand Barrels a Second: The Coming Oil Break Point and the Challenges Facing an Energy Dependent World] Once peak oil occurs, then the historic patterns of world oil demand and price cycles will cease. In recent years, the realization of price stability has depended on the effectiveness of nations belonging to the Organization of the Petroleum Exporting Countries (OPEC) to adjust for the production increases and lags of the non-OPEC nations.
This is leading to what Tertzakian calls a "break point."
"Although the stakes have never been greater, the history of energy shows that a time of crisis is always followed by a defining break point, after which government policies, and social and technological forces, begin to rebalance the structure of the world's vast energy complex. Break points are crucial junctures marked by dramatic changes in the way energy is used.
"During the break point and the rebalancing phase that follows (which can last for 10 to 20 years), nations struggle for answers, consumers suffer and complain, the economy adapts, and science surges with innovation and discovery. In the era that emerges, lifestyles change, businesses are born and fortunes are made."
[8/3/06] The reason for high oil prices: speculation?
[7/27/06] LONDON (Reuters) -- Oil prices will soar to well over $100 a barrel and stay high as part of a sustained commodities bull run that has another 15 years of life, billionaire U.S. investor Jim Rogers told Reuters in an interview.
"We're going to have high oil prices for a very long time. The surprise is going to be how high it goes," Rogers said.
Reiterating earlier comments that oil prices would hit at least $100 a barrel, he said: "It will be much more than $100 before the bull market is over."
[via Maverick of investwise 7/14/06]
[6/2/06] Is the oil boom over?
[12/18/05] The Energy Department is projecting $57 oil in 25 years (up from their $31 projection last year).
[8/22/05] The term "peak oil" (also known as "Hubbert Peak Theory") was first used by M. King Hubbert, a geophysicist with Royal Dutch Shell (NYSE: RD). In 1956, Hubbert predicted that U.S. oil production would reach a peak between the late 1960s and early 1970s, from which point production rates would forever decline.
Hubbert's prediction proved accurate in 1970, when U.S. production peaked at 11.3 million barrels per day -- a point from which production has been declining ever since. According to the Department of Energy, the United States produced 7.8 million barrels per day in 2003, representing a 31% drop in production from the peak. With oil now at $66 per barrel, there are plenty of "experts" applying the Hubbert theory to say that world oil production is peaking.
[5/2/05] What We Now Know about peak oil
This is leading to what Tertzakian calls a "break point."
"Although the stakes have never been greater, the history of energy shows that a time of crisis is always followed by a defining break point, after which government policies, and social and technological forces, begin to rebalance the structure of the world's vast energy complex. Break points are crucial junctures marked by dramatic changes in the way energy is used.
"During the break point and the rebalancing phase that follows (which can last for 10 to 20 years), nations struggle for answers, consumers suffer and complain, the economy adapts, and science surges with innovation and discovery. In the era that emerges, lifestyles change, businesses are born and fortunes are made."
[8/3/06] The reason for high oil prices: speculation?
[7/27/06] LONDON (Reuters) -- Oil prices will soar to well over $100 a barrel and stay high as part of a sustained commodities bull run that has another 15 years of life, billionaire U.S. investor Jim Rogers told Reuters in an interview.
"We're going to have high oil prices for a very long time. The surprise is going to be how high it goes," Rogers said.
Reiterating earlier comments that oil prices would hit at least $100 a barrel, he said: "It will be much more than $100 before the bull market is over."
[via Maverick of investwise 7/14/06]
[6/2/06] Is the oil boom over?
[12/18/05] The Energy Department is projecting $57 oil in 25 years (up from their $31 projection last year).
[8/22/05] The term "peak oil" (also known as "Hubbert Peak Theory") was first used by M. King Hubbert, a geophysicist with Royal Dutch Shell (NYSE: RD). In 1956, Hubbert predicted that U.S. oil production would reach a peak between the late 1960s and early 1970s, from which point production rates would forever decline.
Hubbert's prediction proved accurate in 1970, when U.S. production peaked at 11.3 million barrels per day -- a point from which production has been declining ever since. According to the Department of Energy, the United States produced 7.8 million barrels per day in 2003, representing a 31% drop in production from the peak. With oil now at $66 per barrel, there are plenty of "experts" applying the Hubbert theory to say that world oil production is peaking.
[5/2/05] What We Now Know about peak oil
Monday, July 24, 2006
Check back in 10 years
Morningstar's Pat Dorsey takes his shot at Ten Stocks for the Next Ten Years. Hopefully he'll do better than the New York Times did in 2000. The stocks are AMGN, CSG, DELL, EBAY, FAST, JNJ, JPM, MA, MDT, SYY.
Thursday, July 13, 2006
The Ultimate Buy-and-Hold Strategy
In theory, a “perfect” investment strategy would be cheap, easy to implement and risk-free. It would make you fabulously rich in about a week. Tax-free, of course. We haven’t found that combination, and we don’t expect to. But the Ultimate Buy-and-Hold Strategy is the best real-world substitute that we’ve found.
The Ultimate Buy-and-Hold Strategy produces higher returns than the investments most people hold. It does so at lower risk, with minimal transaction costs. It’s mechanical, so it does not depend on finding the right guru to make the right predictions about an individual company, the market or the economy. You will never again have to rely on financial publications for articles with headlines like “The 10 Funds You Should Own Now.”
Even though this strategy is based on the finest academic research available, it’s simple and easy to understand. If I had to sum it up in one sentence, I’d do it this way:
The Ultimate Buy-and-Hold Strategy uses no-load index funds to create a sophisticated asset allocation model with worldwide diversification and the addition of value stocks and small-cap stocks to a traditional large-cap growth stock portfolio.
If you think you already know what that means and you’re tempted to skip the rest of this article, I hope you won’t. The evidence I’m about to show you is compelling, and I hope you’ll let me present it.
-- Paul Merriman, Merriman Capital Management, FundAvice.com
[8/17/14 - 2014 update]
The Ultimate Buy-and-Hold Strategy produces higher returns than the investments most people hold. It does so at lower risk, with minimal transaction costs. It’s mechanical, so it does not depend on finding the right guru to make the right predictions about an individual company, the market or the economy. You will never again have to rely on financial publications for articles with headlines like “The 10 Funds You Should Own Now.”
Even though this strategy is based on the finest academic research available, it’s simple and easy to understand. If I had to sum it up in one sentence, I’d do it this way:
The Ultimate Buy-and-Hold Strategy uses no-load index funds to create a sophisticated asset allocation model with worldwide diversification and the addition of value stocks and small-cap stocks to a traditional large-cap growth stock portfolio.
If you think you already know what that means and you’re tempted to skip the rest of this article, I hope you won’t. The evidence I’m about to show you is compelling, and I hope you’ll let me present it.
-- Paul Merriman, Merriman Capital Management, FundAvice.com
[8/17/14 - 2014 update]
Wednesday, July 12, 2006
The average S&P 500 stock
[7/12/06] The S&P 500 index is now trading at 14.5 estimated 2006 earnings with a forecast of 12% earnings growth in 2006. [That sounds pretty reasonable to me.]
-- Markets Are Never Wrong?, James Holloway, Vice President S&P Editorial
[4/20/05] Right now the average S&P 500 company sports a return on equity of 20%. It's priced at 19 times free cash flow and 20 times trailing 12 months' earnings. It's expected to grow those earnings at just under 13%. (And for those of you punching away at your calculators, yes, the average company is therefore selling at a PEG of more than 1.5, and so is by traditional metrics overpriced.) Finally, the average company pays a historically tiny 2% dividend.
Actually that average company sounds pretty good to me.
[updated 7/18/05] 18 times free cash flow, 19 times trailing earnings.
-- Markets Are Never Wrong?, James Holloway, Vice President S&P Editorial
[4/20/05] Right now the average S&P 500 company sports a return on equity of 20%. It's priced at 19 times free cash flow and 20 times trailing 12 months' earnings. It's expected to grow those earnings at just under 13%. (And for those of you punching away at your calculators, yes, the average company is therefore selling at a PEG of more than 1.5, and so is by traditional metrics overpriced.) Finally, the average company pays a historically tiny 2% dividend.
Actually that average company sounds pretty good to me.
[updated 7/18/05] 18 times free cash flow, 19 times trailing earnings.
The Gospel of Wealth
"The Gospel of Wealth" was an essay written by Andrew Carnegie in 1889 that described the responsibility of philanthropy by the new upper class of self-made rich. The central thesis of Carnegie's essay was the peril of allowing large sums of money to be passed into the hands of persons or organizations ill-equipped mentally or emotionally to cope with them. As a result, the wealthy entrepreneur must assume the responsibility of distributing his fortune in a way that it will be put to good use, and not wasted on frivolous expenditure. The very existence of poverty in a capitalistic society could be negated by wealthy philanthropic businessmen.
Carnegie based his philosophy on the observation that the heirs of large fortunes frequently squandered them in riotous living rather than nurturing and growing them. Even bequeathing one's fortune to charity was no guarantee that it would be used wisely, since there was no guarantee that a charitable organization not under one's direction would use the money in accordance with one's wishes. Carnegie disapproved of charitable giving that merely maintained the poor in their impoverished state, and urged a movement toward the creation of a new mode of giving which would create opportunities for the beneficiaries of the gift to better themselves. As a result, the gift would not be merely consumed, but would be productive of even greater wealth throughout the society.
-- link from brknews, 7/2/06
Carnegie based his philosophy on the observation that the heirs of large fortunes frequently squandered them in riotous living rather than nurturing and growing them. Even bequeathing one's fortune to charity was no guarantee that it would be used wisely, since there was no guarantee that a charitable organization not under one's direction would use the money in accordance with one's wishes. Carnegie disapproved of charitable giving that merely maintained the poor in their impoverished state, and urged a movement toward the creation of a new mode of giving which would create opportunities for the beneficiaries of the gift to better themselves. As a result, the gift would not be merely consumed, but would be productive of even greater wealth throughout the society.
-- link from brknews, 7/2/06
Monday, July 10, 2006
cash is king for balance sheet strength
Investors are often told to look for companies that have a "strong balance sheet," and one of the measures they often use is the ratio of long-term debt to stockholders' equity. Unfortunately, Schwab research has found that such debt ratios of little use as stock selection tools.
Historically, stocks with little or no long-term debt have not outperformed market averages. Not surprisingly, the stock market is generally too efficient to reward metrics in such widespread use.
But that's not to say that balance-sheet strength is irrelevent for stock selection. An alternative indicator that many investors tend to overlook is a company's cash liquidity level as an indicator of future returns.
The ratio of cash and marketable securities to market capitalization as a measure of balance-sheet strength is simple and intuitive, but apparently not fully appreciated by the market. Among the 3200 largest U.S. companies (excluding financial firms, whose cash balances are largely offset by short-term liabilities), a simulated portfolio containing the 5% of stocks with the most cash have historically delivered an annual buy-and-hold return of about 24% versus 14% for the average stock ranked over the period 1986-2005. While past returns don't guarantee future results, the potential power of this simple indicator is intriguing.
One note of caution in researching the investment merits of firms with lots of cash on the balance sheet: it's critical to understand where the cash came from. The Statement of Cash Flows (found in a firm's annual 10-K report) is a great tool for this purpose because it reveals the sources of recent changes in a firm's cash balance.
For example, a firm generating positive cash flows from operations is preferable as this is a sign of a healthy business. On the other hand, a firm whose high cash balance stems from recent financoing efforts such as share offerings or debt issues, or from investing activities such as the sale of a business unit, is much less interesting as these sources of cash flow tend to be one-time shots.
-- Greg Forsythe, On Investing Magazine, Fall 2005
The article goes on name several stocks worthy of further research, all of which have positive and growing cash flow from operations: ASF, AET, AGYS, IMN, SFA (Scientific Atlanta has since been acquired by Cisco), UNTD.
Historically, stocks with little or no long-term debt have not outperformed market averages. Not surprisingly, the stock market is generally too efficient to reward metrics in such widespread use.
But that's not to say that balance-sheet strength is irrelevent for stock selection. An alternative indicator that many investors tend to overlook is a company's cash liquidity level as an indicator of future returns.
The ratio of cash and marketable securities to market capitalization as a measure of balance-sheet strength is simple and intuitive, but apparently not fully appreciated by the market. Among the 3200 largest U.S. companies (excluding financial firms, whose cash balances are largely offset by short-term liabilities), a simulated portfolio containing the 5% of stocks with the most cash have historically delivered an annual buy-and-hold return of about 24% versus 14% for the average stock ranked over the period 1986-2005. While past returns don't guarantee future results, the potential power of this simple indicator is intriguing.
One note of caution in researching the investment merits of firms with lots of cash on the balance sheet: it's critical to understand where the cash came from. The Statement of Cash Flows (found in a firm's annual 10-K report) is a great tool for this purpose because it reveals the sources of recent changes in a firm's cash balance.
For example, a firm generating positive cash flows from operations is preferable as this is a sign of a healthy business. On the other hand, a firm whose high cash balance stems from recent financoing efforts such as share offerings or debt issues, or from investing activities such as the sale of a business unit, is much less interesting as these sources of cash flow tend to be one-time shots.
-- Greg Forsythe, On Investing Magazine, Fall 2005
The article goes on name several stocks worthy of further research, all of which have positive and growing cash flow from operations: ASF, AET, AGYS, IMN, SFA (Scientific Atlanta has since been acquired by Cisco), UNTD.
Sunday, July 09, 2006
The Changing Face of Growth Investing
While an appealing case can be made in general for growth investing, managers agree that investors have to be more careful than usual in identifying companies that offer superior growth potential.
There are increased concerns that some traditional growth sectors such as pharmaceuticals and technology, as well as some companies that have been considered leading growth companies in the past, may face slower growth prospects in the future.
Robert Sharps, manager of the Institutional Large-Cap Growth Fund, believes that various growth companies, such as those operating in areas like food and beverage, household products, and pharmaceuticals, “just don’t have the sort of growth prospects now that they once did. Technology is another sector that will not grow the way it has. It already accounts for 50% of total capital expenditures, compared with 10% in the past. It’s basically finished taking share of such expenditures. Companies like IBM, Cisco Systems, and Intel face more significant growth challenges.
“So, you have to be more selective and look for companies that haven’t already consolidated their industry and don’t already have massive share of their market and very high (profit) margins already. That might include sectors like biotechnology, HMOs, or Internet-oriented companies —- stocks like eBay, Yahoo!, Gilead Sciences, and UnitedHealth Group.
-- T. Rowe Price Report, Spring 2005
There are increased concerns that some traditional growth sectors such as pharmaceuticals and technology, as well as some companies that have been considered leading growth companies in the past, may face slower growth prospects in the future.
Robert Sharps, manager of the Institutional Large-Cap Growth Fund, believes that various growth companies, such as those operating in areas like food and beverage, household products, and pharmaceuticals, “just don’t have the sort of growth prospects now that they once did. Technology is another sector that will not grow the way it has. It already accounts for 50% of total capital expenditures, compared with 10% in the past. It’s basically finished taking share of such expenditures. Companies like IBM, Cisco Systems, and Intel face more significant growth challenges.
“So, you have to be more selective and look for companies that haven’t already consolidated their industry and don’t already have massive share of their market and very high (profit) margins already. That might include sectors like biotechnology, HMOs, or Internet-oriented companies —- stocks like eBay, Yahoo!, Gilead Sciences, and UnitedHealth Group.
-- T. Rowe Price Report, Spring 2005
Friday, July 07, 2006
dividends and growth?
An old adage holds that investors in dividend stocks are being "paid to wait for the stock to appreciate." Academic research suggests they may not have to wait very long. Dividends, it turns out, can actually forecast earnings growth. And earnings growth, of course, drives stock gains.
The idea that dividends can foreshadow earnings sounds illogical, like using a sore backside to predict a kick in the pants. Dividends, after all, are paid with the money a company earns. One would expect earnings growth to predict dividends, not the other way around. But it works.
Robert Arnott and Clifford Asnes studied the relationship between the percentage of earnings paid out as dividends - what's known as the payout ratio - and subsequent earnings growth. They studied 130 years of dividend data, but focused primarily on S&P 500 numbers since 1946, which they called the "modern period."
Their findings in their paper "Surprise! Higher Dividends = Higher Earnings Growth" defy conventional wisdom that dividend payers are slow growers. Higher payout ratios predicted faster earnings growth over the next 10 years.
-- Jack Hough, SmartMoney, October 2005
The idea that dividends can foreshadow earnings sounds illogical, like using a sore backside to predict a kick in the pants. Dividends, after all, are paid with the money a company earns. One would expect earnings growth to predict dividends, not the other way around. But it works.
Robert Arnott and Clifford Asnes studied the relationship between the percentage of earnings paid out as dividends - what's known as the payout ratio - and subsequent earnings growth. They studied 130 years of dividend data, but focused primarily on S&P 500 numbers since 1946, which they called the "modern period."
Their findings in their paper "Surprise! Higher Dividends = Higher Earnings Growth" defy conventional wisdom that dividend payers are slow growers. Higher payout ratios predicted faster earnings growth over the next 10 years.
-- Jack Hough, SmartMoney, October 2005
The Index Effect
Given its name, you'd think the S&P 500 index of large company stocks would include the 500 largest publicly traded corporatoins. But that would be too easy -- and the truth is more interesting anyway.
Standard & Poor's, which constructs the index, has a committee of eight staffers who meet in private every month to decide what goes in and what gets tossed. They follow guidelines pertaining to issues including liquidity, shares available to the public, sector balance and financial viability. But in the end, the index is composed of whatever the committee decides are the "leading companies in leading industries."
It's a big responsibility, seeing that Americans have $1.2 trillion invested in index funds that trac the S&P 500. In fact, the power of the index is such that the companies gaining entry often enjoy a significant, persistant gain in share price.
Hypothetically, you can make money trading on this so-called index effect, though it'll probably take a lot of effort. One strategy: buy on the date the addition is announced, and sell several days later, when the change goes into effect -- typically, you'll see a 6 percent gain, says, Vijay Singal, a Pamplin College of Business finance professor. You can do even better trading on S&P 500 deletions. When a company is knocked out of the index, the price typically falls at least 10 percent between the announcement and the effective data, then rebounds to its starting point.
Sounds like a sure thing, but Singal warns the price movements are simply historical averages -- it's impossible to predict what will happen with any particular stock. "You need a large sample of trades over a period of two years for it to work," he says.
-- Anne Kadet, Ask SmartMoney, October 2005
Standard & Poor's, which constructs the index, has a committee of eight staffers who meet in private every month to decide what goes in and what gets tossed. They follow guidelines pertaining to issues including liquidity, shares available to the public, sector balance and financial viability. But in the end, the index is composed of whatever the committee decides are the "leading companies in leading industries."
It's a big responsibility, seeing that Americans have $1.2 trillion invested in index funds that trac the S&P 500. In fact, the power of the index is such that the companies gaining entry often enjoy a significant, persistant gain in share price.
Hypothetically, you can make money trading on this so-called index effect, though it'll probably take a lot of effort. One strategy: buy on the date the addition is announced, and sell several days later, when the change goes into effect -- typically, you'll see a 6 percent gain, says, Vijay Singal, a Pamplin College of Business finance professor. You can do even better trading on S&P 500 deletions. When a company is knocked out of the index, the price typically falls at least 10 percent between the announcement and the effective data, then rebounds to its starting point.
Sounds like a sure thing, but Singal warns the price movements are simply historical averages -- it's impossible to predict what will happen with any particular stock. "You need a large sample of trades over a period of two years for it to work," he says.
-- Anne Kadet, Ask SmartMoney, October 2005
Thursday, July 06, 2006
risk and return
Schwab has devloped a "risk gauge" that quantifies the overall risk of each of the approximately 3000 stocks they follow.
Surprisingly, historically less risk has been associated with more return! Indeed, the 30% of stocks ranked as most risky by the gauge not only have been more volatile than the market, they historically have underperformed the average stock over 60% of the time on an annual buy-and-hold basis from 1986-2005.
The lesson is that investors seeking higher returns should avoid stocks with high market sensitivity, small size and high EPS growth forecasts.
Ten stocks worthy of further research that are currently in the lowest 10% of the risk gauge rankings and also A-rated by Schwab Equity Ratings are ABC, ADM, BDX, XOM, LMT, MET, NWL, RTN, SLE, CTL [none of which I own].
-- Greg Forsythe, Charles Schwab OnInvesting Magazine, Summer 2006
Surprisingly, historically less risk has been associated with more return! Indeed, the 30% of stocks ranked as most risky by the gauge not only have been more volatile than the market, they historically have underperformed the average stock over 60% of the time on an annual buy-and-hold basis from 1986-2005.
The lesson is that investors seeking higher returns should avoid stocks with high market sensitivity, small size and high EPS growth forecasts.
Ten stocks worthy of further research that are currently in the lowest 10% of the risk gauge rankings and also A-rated by Schwab Equity Ratings are ABC, ADM, BDX, XOM, LMT, MET, NWL, RTN, SLE, CTL [none of which I own].
-- Greg Forsythe, Charles Schwab OnInvesting Magazine, Summer 2006
Tuesday, July 04, 2006
Learning from our mistakes
This week (writes John Mauldin) we look at mistakes and why we don't learn from them, at least not initially. Good friend James Montier explores the limits to learning we all have and offers some help on how to overcome them. Investors are constantly facing these challenges against their own biases when making sound decisions.