The Pragmatic Capitalist has aggregated the large institutional forecasts for 2010. Simply follow the links.
http://pragcap.com/the-ultimate-guide-to-2010-investment-predictions-and-outlooks
Thursday, December 31, 2009
Tuesday, December 22, 2009
8 Resolutions!!
Credit goes to Gurufocus for this wonderful interview with money manager Jonathan Hirtle. Hirtle published 8 resolutions which provides a framework for investors.
1. I will remember that there is no free lunch. Stock market investing provides returns that are higher than returns from bonds and cash equivalents, because stocks are almost always more risky than bonds and cash equivalents. Periodically that risk is revealed through dislocation. That dislocation is the price I pay for higher returns. I will not commit more assets to stocks and stock-like investments, than I can tolerate during the next dislocation.
2. I will always be skeptical – but never cynical. Skepticism is healthy. Cynicism is not. Doomsday pessimism is just the mirror image of pie-in-the-sky optimism and both are highly unlikely. I will make prudent investment decisions based on likely, not unlikely, outcomes.
3. I will conduct my own due diligence. I will not invest because a friend has, or because recent returns have been high. Most of the best investment strategies in the world are based on common sense. If I can’t understand the investment process, I will not invest.
4. I will stay diversified. No matter how compelling an investment or an investment strategy sounds, I will only believe a little bit. Wealth is created and lost through concentration, and I dare not concentrate in a business or investment where I possess knowledge that is anything short of mastery.
5. I will think of risk in total. That means my operating risk and financial risk, as well as investment risk. Only families and organizations with strong, reliable cash flows and low debt levels can afford to pursue extraordinary returns through a risky investment strategy.
6. I will value my investment portfolio infrequently. Monthly at most. Quarterly is better. Daily valuation aggravates a false sense of gyrating value. Daily pricing has to do with supply and demand – not value. Value is created over long periods of time – a business cycle. I will match my investment horizon to the time it takes to drill new wells, develop new drugs and capture more market share – years, not days or months – and the longer, the better. Successful investing requires careful decisions driven by valuation and process, as well as the discipline to let that process work.
7. I will always care about price. There is no asset that is attractive at any price and there is almost no asset that is not attractive at some price. Price always matters. Price is the trump card. As price increases, risk often increases, so I will use quarterly cash flows to rebalance incrementally.
8. I will never forget the difference between investing and speculating. No matter how many times I hear it on television, I will remember that there is no such thing as a “speculative investor” or even a “short term investor.” Equating investing with speculating is like equating work with gambling. Speculating is not investing. Trading is not investing. Investing is investing. It is solely about acquiring future cash flows at an attractive price – period. If I do not know what price is attractive or if I know that an asset is overpriced, but I expect it to become even more overpriced, then I am speculating, not investing. While I can sometimes make money speculating, its outcome is far more random than that of investing.
1. I will remember that there is no free lunch. Stock market investing provides returns that are higher than returns from bonds and cash equivalents, because stocks are almost always more risky than bonds and cash equivalents. Periodically that risk is revealed through dislocation. That dislocation is the price I pay for higher returns. I will not commit more assets to stocks and stock-like investments, than I can tolerate during the next dislocation.
2. I will always be skeptical – but never cynical. Skepticism is healthy. Cynicism is not. Doomsday pessimism is just the mirror image of pie-in-the-sky optimism and both are highly unlikely. I will make prudent investment decisions based on likely, not unlikely, outcomes.
3. I will conduct my own due diligence. I will not invest because a friend has, or because recent returns have been high. Most of the best investment strategies in the world are based on common sense. If I can’t understand the investment process, I will not invest.
4. I will stay diversified. No matter how compelling an investment or an investment strategy sounds, I will only believe a little bit. Wealth is created and lost through concentration, and I dare not concentrate in a business or investment where I possess knowledge that is anything short of mastery.
5. I will think of risk in total. That means my operating risk and financial risk, as well as investment risk. Only families and organizations with strong, reliable cash flows and low debt levels can afford to pursue extraordinary returns through a risky investment strategy.
6. I will value my investment portfolio infrequently. Monthly at most. Quarterly is better. Daily valuation aggravates a false sense of gyrating value. Daily pricing has to do with supply and demand – not value. Value is created over long periods of time – a business cycle. I will match my investment horizon to the time it takes to drill new wells, develop new drugs and capture more market share – years, not days or months – and the longer, the better. Successful investing requires careful decisions driven by valuation and process, as well as the discipline to let that process work.
7. I will always care about price. There is no asset that is attractive at any price and there is almost no asset that is not attractive at some price. Price always matters. Price is the trump card. As price increases, risk often increases, so I will use quarterly cash flows to rebalance incrementally.
8. I will never forget the difference between investing and speculating. No matter how many times I hear it on television, I will remember that there is no such thing as a “speculative investor” or even a “short term investor.” Equating investing with speculating is like equating work with gambling. Speculating is not investing. Trading is not investing. Investing is investing. It is solely about acquiring future cash flows at an attractive price – period. If I do not know what price is attractive or if I know that an asset is overpriced, but I expect it to become even more overpriced, then I am speculating, not investing. While I can sometimes make money speculating, its outcome is far more random than that of investing.
Wednesday, December 2, 2009
1 YR/3YR Forward Looking Projections with Timing Signals December 09
| I. Commodities: | 1 Yr. | 3 Yr. | Signal | |
| All Commodities | 15.0% | 24.5% | Bull | |
| Oil | 18.0% | 34.0% | Bull | |
| Natural Gas | 27.0% | 43.0% | Bear | |
| Grains | 6.2% | 16.8% | Bull | |
| Industrial Metals | 10.1% | 21.8% | Bull | |
| Gold | -13.2% | -4.4% | Bull | |
| Silver | -0.9% | 13.3% | Bull | |
| II. Fixed Income | | |||
| US Treasuries | -3.2% | 0.6% | Bull | |
| Treasury Inflation Protected | -1.4% | 2.8% | Bull | |
| Corporate Preferreds | 2.4% | 6.8% | Bull | |
| Corporate Bonds | -2.2% | 1.4% | Bull | |
| High Yield Corporate Bonds | 2.3% | 8.6% | Bull | |
| Global Bonds | -5.5% | 3.5% | Bull | |
| Emerging Market Bonds | -5.0% | 6.8% | Bull | |
| III. Global Stocks | | |||
| Global Stocks Ex- US | 12.6% | 22.8% | Bull | |
| Emerging Markets | 2.7% | 15.7% | Bull | |
| IV. US Stocks | | |||
| All US Stocks | 12.2% | 20.6% | Bull | |
| Dow Jones Industirals | 9.3% | 17.0% | Bull | |
| Dow Jones Transports | 12.1% | 22.6% | Bull | |
| SP 500 | 12.4% | 20.6% | Bull | |
| Nasdaq Composite | 6.8% | 16.5% | Bull | |
| Russell 2000 | 15.6% | 25.4% | Bull | |
| V. Special Opportunities | | |||
| US Real Estate | 27.8% | 43.8% | Bull | |
| International Real Estate | 26.0% | 38.0% | Bull | |
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