Tag Archives: Warren Buffett

POCKETBOOK: Week ending Feb.23, 2018

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  •   Some NRA related goodies now gone

I continue to be so very very proud of the students at Parkland, Florida’s Marjory Stoneman Douglas High School and their behavior following the horrific slaughtering of their fellow students on Valentine’s Day. Their actions have changed—in a positive way–how I look at young people today. And, their impact across the country is not only admirable but their determination to make changes to the power that the NRA wields within our local and state governments and in Congress, with respect to the insane gun laws practiced in our country, is Nobel Prize for Peace worthy.

What today’s students are telling their fellow Americans of all ages is that they know better: Automatic rifles don’t belong in the hands of ordinary citizens because they are weapons designed for the sole purpose of killing groups of people within seconds. And the kids’ points are well-made and correct.

These kids also know that the wheels of justice aren’t WiFi connected or on speed dial regarding the amount of time it takes to change things. To that end, I was glad to read that some of our country’s most recognized brand business names have taken steps to hit NRA members where it hurts them the most—in their pocketbooks.

Of course some will say that  there are fairness issues here, but life trumps fairness. Always has. Always will.

So hats off to the organizations, firms and institutions that have decided to end their discount programs with the NRA and its members. A few of them include: Symantec, Chubb, Enterprise, MetLife, Best Western and Wyndham Hotels.

To learn more, visit #BoycottNRA on Twitter.

 

  • Market Quick Glance

Words of advice from Warren Buffett’s latest annual letter: Don’t ever borrow money to buy stocks.

Amen to that.

And to these words from Buffett quoting his partner, Charlie Munger, a triple Amen: There are three ways to go broke:”liquor, ladies and leverage”.

As for last week, the place to bet in last week’s index winner performance race was Nasdaq—-it gained the most with a y-t-d return of almost 6.3% as of Friday’s close.

With stock volatility still very much in fashion and interest rates edging upwards, some are worried about inflation while others—namely Treasury Secretary Mnunchin—is pooh-poohing it and it’s impact.

I personally think he is way wrong. But then again, what do women know? (Wink wink.) A rising interest rate environment will affect all of us whether we are investors or not.

Below are the weekly and 1-year index performance results for four major indices— including the dates each reached new highs—according to CNBC.com based on prices at the close of business on Friday, Feb. 23, 2018.

DJIA 2.02% YTD up from last week’s 2.02%  

  • 1 yr Rtn 22.31%

Most recent DJIA all-time high was reached on January 26, 2018 of 26,616.71. The previous high was reached January 18, 2018 was 26,153.42.

-S&P 500 2.76% YTD up from last week’s 2.19%

  • 1 yr Rtn +16.22% down from last week’s 16.40%

The S&P 500 reached its most recent all-time high on January 26, 2018 of 2,872.87. The previous high was reached on January 19, 2018 of 2810.33.

-NASDAQ +6.29 YTD up from last week’s 4.87%

  • 1yr Rtn +27.74% up from last week’s 24.50%

Nasdaq latest new all-time high of 7,505.77 was reached on January 26, 2018. The previous high was reached on January 19, 2018 of 7,336.38.

-Russell 2000 +0.89%YTD up from last week’s 0.52%

  • 1yr Rtn +11.08% up from last week’s +10.32%

The Russell 2000 reached an all-time high on January 24, of 1,615.52. The previous high was reached on January 16, 2018 of 1,604.02.

 

-Mutual funds

As of Monday, Feb. 26, no new Lipper Performance figure updates were available.

Here is last a repeat of week’s report: On Thursday, Feb. 15, 2018, the year-to-date average cumulative total reinvested returns for equity funds that fall under the broad U.S. Diversified Equity Funds heading was +1.53%, according to Lipper. That’s down from the -3.40% posted one week earlier.

Lipper tracks 25 of the largest mutual funds around. Within that group, here are some of the year-to-date returns of a few of those individual funds:

  • The three funds with the highest returns, ytd:

-Fidelity Contrafund, up 6.58%

-American Funds Growth A, up 5.49%

-Vanguard FTSE Emerging Market ETF Fund, up 5.03%

 

  • The three funds with the least returns, ytd:

-Vanguard Total Bond ll: Inv, -2.31%

-Vanguard Total Bond ll: Inv., -2.31%

-American Funds CIB:A, -0.59%

Visit www.allaboutfunds.com for more information about how various equity and fixed-income funds have rewarded investors over the short-and long-term, based upon Lipper data. Short-term meaning weekly and monthly performance returns; longer-term includes quarterly, year-to-date, 1-yr, 2-yr, 3-yr and 5-yr returns.

 

•BlackRock

BlackRock is one heck of an investment firm and through the years has rewarded investors in its various index funds, ETFs, mutual funds and closed-end funds quite nicely.

That said, BlackRock, with an estimated $6 billion in assets that it manages, is a big time indirect gun company investor, according to the Associated Press.

Through its indirect investments,that same source reports that BlackRock is the largest stakeholder in America’s largest gun manufacturers. FactSet has reported that BlackRock has a 16.18% stake in Sturm Ruger, 11.91% in Vista, and a 10.5% stake in American Outdoor.

The trouble with fund investing is that it takes more than public outcry to change holdings in a fund, such as in mutual and index funds and ETFs. And, any changes in a fund’s investment objectives, style and holdings can’t be done willy-nilly: Changes and/or resolutions require votes and those voting privileges go out to everyone. That means you, as a shareholder, has voting rights.

Keep that in mind the next time you receive a voting proxy in the mail and decide to toss it out rather than to vote.

Funds are terrific investment vehicles. But, they are group investments. Don’t like what the fund invests in? Choose another fund. There are literally tens of thousands to choose from. Some are even Socially Responsible funds. Typically they don’t invest in sin stocks—like companies that make guns or ammunition.

Read a fund’s prospectus or check out its fund holdings before investing. You will find that info online at various sources. And don’t forget— a listing of  fund’s investments is partial and holdings aren’t updated daily but updated quarterly.

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POCKETBOOK: Week ending Nov.11, 2016

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  • A 25% win

Lest you believe that all of America loves President-elect Donald Trump, think again: Less than  50 % of all registered voters cast a ballot this year—the lowest voter turnout since 1984. Of that half, only about half of them voted for Trump for president. That translates into a win of roughly 25%. Nothing to write home about even though it translated into a White House win.

What a President Trump means for an America— in which 75% of citizens either decided not to vote or didn’t vote for him— is worrisome.

So, when you hear all the talking heads on radio, tv or online saying America is a divided nation, don’t believe them. America is way more than an equally divided nation—it is a seriously divided nation with a compass pointer strongly tilted toward the negative  and anchored in that direction by  fear and uncertainty.

And no, Trump did not win by a huge majority.

  • Market Quick Glance

A week ago, very few would have predicted that Donald Trump would win the election. Or, that stocks would host a hot diggity dog post Election Day rally during the days that followed. But, all of that did happen. You haven’t been dreaming.

What that positive news means for investors in the near term or by year’s end  is, of course, anybody’s guess as there will be plenty of economic news coming forth next week and during the weeks that follow.

Warren Buffett, the very comfortable and happiest looking optimist in America today, told CNNs Poppy Harlow,  (during a worth listening to interview),  that he doesn’t know how stock prices will perform next year. But, that in 15 to 20 years they would  be higher.

Nothing particularly sage-like about that call. But hey, Buffett is nice to listen to and watching him makes me kinda wanna jump up  on his lap–and pick his pockets.

With that visual in mind, below are the weekly and 1-year performance results for four popular stock indices along with their respective P/E Ratios. Figures are all  based on prices at the close of business on Friday, Nov.11, 2016 and according to Bloomberg.

-Indices:

-Dow Jones +10.70% YTD up substantially from last week’s 4.91%

  • 1yr Rtn +12.23% up a lot from last week’s 2.28%

P/E Ratio 17.97 up from last week’s 17.05

-S&P 500 +7.92% YTD up double from last week’s 3.38%

  • 1yr Rtn +9.34% up plenty from last week’s 1.50%

P/E Ratio 20.21 up from week’s 19.49

NASDAQ +5.81% YTD up from last week’s 1.93%

  • 1yr Rtn +7.71% way up from last week’s -0.61%

P/E Ratio 30.31 up from last week’s 29.43

Russell 2000 +14.34 YTD seriously up from last week’s 3.69%

  • 1yr Rtn +13.55% also seriously up from last week’s -1.55%

P/E Ratio 45.14 up from last week’s 41.25

 

-Mutual funds

After a week that was, the year-to-date  average return on  U.S. Diversified Equity Funds was up 6.15% at the close of business on Thursday, Nov.10, 2016, according to Lipper.

Under that broad umbrella heading, Small-Cap Value Funds scored the most, up on average 14.87%. They were followed by Equity Leverage Funds, up 14.74%.

The average Sector Equity Fund was up 7.87% with Precious Metals Equity Funds up 67.83 now—way off their year-to-date average fix-figure highs.

Around the world, Latin American Funds were up on average 24.31% and continue to top the year-to-date performance figures under the World Equity Funds heading. They, however, have  lost ground too. Last week their average y-t-d return was over 35%.

Please visit www.allaboutfunds.com for more information about how various equity and fixed-income funds have rewarded investors over the short-and long-term, based upon Lipper data. Short-term meaning weekly and monthly performance returns; longer-term includes quarterly, year-to-date, 1-yr, 2-yr, 3-yr and 5-yr returns.

 

  • Presidential Market Returns

History has shown us that a Democrat in the White House has proven more profitable to investors than when Republicans have lived there.

The  4-year annualized returns of the S&P 500, beginning on March 4, 1929 through August 5, 2016, show  during Democratic administrations the average annualized return of that index  up 10.83% vs. a  1.71% return under a Republican presidency, according to Forbes.

Oh my.

That said, four-year market returns basically have little to do with the party of the President. What matters much more than a party’s donkey or elephant affiliation is a host of other conditions—such as economic conditions, corporate profits, wars or lack of them, inflation, employment, etc. etc.

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POCKETBOOK: Week ending May 7, 2016

IMG_0204      •How you doin?

According to Transamerica Center for Retirement Studies, the average retirees nest egg  now totals $119,000; for those married, it is $224,000; and for singles, it is $40,000.

  • Market Quick Glance

-Indices:

Here are the year-to-date performance figures for the major indices through May 6, 2016, according to Bloomberg. To provide a longer performance perspective, 1-year returns have been added.

Stocks continued to have another tough week with all indices losing ground this first week of May, dragging their 1-year returns right down with them.

Warren Buffett told his groupies that if interest rates remained at 0 for 50 years the DJIA would hit 100,000. That’s a “Doh!” When fixed-income products yield nothing there is no other place for investors who believe in corporate America to go but to invest in stocks.

-Dow Jones +2.73% YTD

1yr Rtn + 0.04% (last week’s 1-yr return: + 1.21%)

-S&P 500 +1.40% YTD

1yr Rtn -0.67 % (last week’s 1-ry return: +0.10%

NASDAQ -4.94% YTD

1yr Rtn -4.09 (last week’s 1-yr return: -3.35%)

Russell 2000 -1.38 % YTD

1yr Rtn -8.40 % (last week’s 1-year return: -6.57%

-Mutual funds

Through Thursday, May 5, 2016 the average U.S.Diversified Equity Fund lost ground again and ended the first week of May down nearly 1 percent year-to-date, 0.80 to be exact, according to Lipper.

Equity Leveraged Funds, there are 202 of them, lost ground as well although still maintained plus-side returns, up 3.12 percent year-to-date on average. Behind them were Mid-Cap Value Funds up 3.01 percent.

Still rocking under the Sector Equity Funds heading were Precious Metals Funds, up on average 71.62 percent as of Thursday’s close. That’s a couple of percent less than the previous week’s close. Even gold is having a hard time shining in this market.

The average Sector Equity Fund was up 5.10 percent y-t-d. Also down from the previous week.

Visit www.allaboutfunds.com for weekly updates to see how equity and fixed-income funds have rewarded investors over the short-and long-term, based upon Lipper data. Short-term meaning weekly and monthly performance returns; longer-term includes quarterly, year-to-date, 1-yr, 2-yr, 3-yr and 5-yr returns.

Lipper’s weekly performance figures for stock and fixed-income funds are at www.allaboutfunds.com in the left column on the home page.

 •Time to lower your expectations

While there’s no calling the market, there are indications that our US markets, right along with those in the developed nations around the globe, are in a world of economic hurt.

Last month the McKinsey Global Institute published a report “Why investors may need to lower their sights” pointing out past market performances.

They write: “Total returns on equities and bonds in the United States and Western Europe from 1985 to 2014 were significantly higher than the long-term average.”

Using that time frame, their report showed that during that 30-year period, US equities returned on average 7.9 percent—the average for the past 100 years was 6.5 percent. For European equities the 30-year average return was also 7.9 percent but 4.9 percent for the past 100 years.

US government bonds averaged 5 percent for the past 30 years and 1.7 percent over the past 100. And European government bonds averaged 1.6 percent returns over the past 100 years and 5.9 percent during the past 30 years.

Going forward, McKinsey’s report estimates annual returns for equities to be about 1.5 to 4 percent lower than the 30-year average and 3 to 5 percent lower for fixed-income.

Whether their past long-term returns are spot on or not, lowering your expectations for this year is worth doing.

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Pocketbook: Week ending April 30, 2016

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  • More bang for your buck

Thanks to the exchange rate, spend 1 US dollar in Canada and you’ll get about $1.20 worth of their goods and services. Or, one more good reason to visit our neighbors to the North.

  • Market Quick Glance

-Indices:

Here are the year-to-date performance figures for the major indices through April 29, 2016, according to Bloomberg. To provide a longer performance perspective, 1-year returns have been added.

Stocks had a tough week with the indices all registering poorer performance at the end of this week than the previous one.

Looks as though a good dividend paying stock, or stocks, could be this year’s most rewarding picks.

Dow Jones +2,83% YTD

1yr Rtn +1.21%

-S&P 500 +1.74% YTD

1yr Rtn +0.10%

NASDAQ -4.23% YTD

1yr Rtn -3.35%

-Russell 2000 +0.02% YTD

1yr Rtn -6.57%

-Mutual funds

Through Thursday, April 28, 2016 the average U.S.Diversified Equity Fund lost ground during the past seven days. While still up modestly for the year, the average fund under this heading that includes 8401 funds was up 1.00 percent year-to-date, according to Lipper.

Equity Leveraged Funds, Lipper tracks 202 of them, have year-to-date returns of 8.2 percent, on average. Behind them were Small- and Mid-Cap Value Funds with year-to-date returns up 5.16 and 5.03 percent respectively.

Dedicated Short-Bias Funds gained some strength, down now only -9.94 percent y-t-d instead of -11.15 percent from the 4/21 weekly report.

As always, it’s Sector Equity Funds where investors will find the best performing fund groups. Thanks to the Precious Metals Funds, up on average 73.83 percent as of Thursday’s close (that’s 8 percent higher than the week previous), the average Sector Equity Fund was up 6.35 percent y-t-d.

Health/Biotech fund types continue losing ground this year.

Visit www.allaboutfunds.com for weekly updates to see how equity and fixed-income funds have rewarded investors over the short-and long-term, based upon Lipper data. Short-term meaning weekly and monthly performance returns; longer-term includes quarterly, year-to-date, 1-yr, 2-yr, 3-yr and 5-yr returns.

Lipper’s weekly performance figures for stock and fixed-income funds are at www.allaboutfunds.com in the left column on the home page.

  • The economy, Buffett, Icahn and me

No two ways about it, the economy is not moving along at a robust pace. And there’s a yellow cautionary flag waving with respect to the near  and not-so-near term future.

So what’s an investor to do? Buffett admits that the economy is not booming, nor is it falling apart.  Carl Icahn says there is big trouble ahead.I say, mind your p’s and q’s.

That means, review your “p”ortfolio and “q”uestion all of your holdings. Then decide again, if the risks you’ve taken to make a buck are as valid today as they were the day you decided to take them.

And don’t forget: no one ever went broke taking a profit.

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