Wikinvest Wire
Saturday, November 11, 2006
The Big Picture For The Week Of November 12, 2006
As you watch please replace the word pretending with the word assuming. I don't like my use of that word but did not want to do the video again and upload again. Thank you.
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15 comments:
Models this week:
Intl. weightings of long positions
MSCI EAFE Index - 40%
MCCI Emerging Markets Index - 30%
Russell 3000 Index - U.S. - 30%
Equity Market Timing Score = 2.0
80% long 20% cash
Top Ranked U.S. Sectors
U.S. Telecommunications - 7.0
U.S. Consumer Goods - 3.5
U.S. Pharmaceuticals - 3.0
U.S. Banks - 3.0
U.S. Financials - 3.0
Composite Internet - 3.0
U.S. Leisure Goods - 3.0
International ETF Top Performance Rankings
MSCI Spain Index Fund - 3
MSCI Mexico Index Fund - 3
MSCI Singapore Index Fund - 3
MSCI Sweden Index Fund - 3
FTSE/Xinhua China 25 - 2
Several interesting developments: 1)The U.S. is losing in relative strength to the foriegn markets. I don't know if this is a shorter term development or if we're going to resume the trend we've seen over the past few years. 2) My timing model ticked down again this week. I leave myself some latitude on what that means on stocks vs. cash, so it was a tough decision for me to move to an 80% long position. 3) Large/Value continues to be the pre-dominate style theme despite the recent gains in Tech and Leisure. Healthcare got pounded and I'll admit I didn't see that coming.
Big-picture charts
U.S. vs. EAFE:
http://stockcharts.com/h-sc/ui?s=$RUA:$IEE&p=D&yr=3&mn=0&dy=0&id=p55519001723
U.S. vs. Emerging:
http://stockcharts.com/h-sc/ui?s=$RUA:$MSEMF&p=D&yr=3&mn=0&dy=0&id=p20895516602
EAFE vs. Emerging:
http://stockcharts.com/h-sc/ui?s=$IEE:$MSEMF&p=D&yr=3&mn=0&dy=0&id=p03086417843
spjdqKirk blog just mentioned a free correlation charting service that may be inyteresting to many: http://www.spdrindex.com/correlation/
Just a quick note to let you know that I really appreciate your balanced, unemotional view of investing and I appreciate your weekly videos... never mind the complainers; living in your parents basement without a girlfriend tends to make you a little testy ;)
Andrew W
San Francisco
Roger,
Informative as always. You have certainly helped me maintain a more balanced focus.
Lisa
It's funny how you leave out the fee you charge your clients along with commission costs. If you add in those costs are you still ahead of the S&P? I doubt it. So, tell me what on earth are people paying you for? In plain english if you were any good you would be running a hedge fund.
to the 10:21 comment;
fees? that is fair, I absoblutle should have netted that5 out. Most clients pay 1%-1.25%. I know that some of our larger accounts pay less, perhaps smaller ones pay more, I don't know that does not fall under my function.
Subtract what you want the result is the same, capturing most of the market for the year.
Commissions? its less than $200 a year once an account in implemented.
If I were any good I would have a hedge fund? I never said I was any good. I won't argue that I might be a buffoon but assuming I am as dumb as you think why do you think so little of your own time as to visit this site and sit through a video. That behavior does not make a lick of sense.
First and foremost, this is a wonderful blog. Incredible access to your process, vision, and real options to consider. Question, though. You id your ytd performance for equities. Are you including the cash amount as part of the beginning balance? Bottomline, your clients are getting a good product if it means sleeping at night and still making money at the market level.Do you still hold your hedge position?
Roger,
Sorry to see that the terrorists are still making you do these videos.
Here's to hoping that they release you very soon!
TomK, thanks as always.
To anon at 4:29,
The YTD performance is for the equity and cash meaning that the cash level was maybe 5% (give or take) at the start of the year and has grown to 15%. so the cash acts as a drag on performance if the market goes up as it has. The way the portfolio is structured now with the cash and the double short ETF I have reduced net expsoure. I expected to lag a big move up and do better in a big decline. The first part has been correct and I think the second part will be too if the market ever goes down again.
Does that mean you have TWO minor league teams in Phoenix? Is there a team playing football in Phoenix at that level?
You posted the process before, but if you could repeat. Where do you like to go(web sites) to learn macro economics of a single country? I started a subscription to the economist. Years ago this magazine got a major theme wrong. In the early to mid 90's they predicted world wide inflation. Based on an ongoing poll of economists. They never seemed to see globalization's effect on our interest rates. Thanks!
To the comment about websites to research country themes, you can click here for that post.
T, Prescott, where I live, only has one minor league team, the Sundogs hockey club.
There is a football team in Arizona called the Cardinals down in, ahem, Glendale in the NFL's experimental "D" league. So far the Cardinals are the only team in this D league.
Seriously, it is strange how a team can be so bad for so many decades. It is strange that they have not mustered up a couple of more winning years in the last 40 than they have. Even broken clock luck says that should have had more winning years, no?
If Roger knew how to hedge he would be up more then what the S&P is up ytd. The fact of the matter is that he has no idea what he blogs about. I hope that Al Queda releases you soon.
In reply to Anonymous 10:21 AM's post, I would say that he/she is no doubt a fan of "The Unbeatable Market" by Ron Ross, as am I.
However he/she must come to the realization that not everyone wants to manage their own portfolio due to time constraints and choose instead a better use of their time.
And the fact Roger that you beat the market enough for your clients to make the fees moot is reason enough for those that would rather spend these hours with their family or in pursuit of their favorite hobby or business, quite happy with the results. This is the main reason that people have others manage their money.
I manage my own money though with a collection of diversified ETFs through Wisdom Tree and iShares, as well as a few stocks such as Citibank and Conoco Phillips. Since I'm single and near retirement I have the time and enjoy the pursuit.
I love your blog Roger, and thank you for your time and FREE advise here. And I also like the unpretentious video background in your basement. What do people here want for nothing...Hollywood? ;)
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