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13 comments:
Roger,
Just heard your brother Larry on the radio (KFNN out of Phoenix) being interviewed by a money manager/financial planner who has a weekly radio show and a money management business down there. Larry called into the show (live). Larry was waxing ecstatic about how good this Phoenix money manager is. Larry also put in a good plug for his book and blog site during the interview.
Is there no LOYALTY anymore? I mean, your own brother was plugging for the competition. I've listened to this guy on the radio for a few years and in my opinion he doesn't begin to have your insight about portfolio management. :)
This is just straight up funny.
My brother seems to like listening to and when he can going on these radio shows. I don't get it.
Your comment about my insight is kind but if I were appearing somewhere and wanted to sell something I must try to make the task seem more difficult not less so.
I'm not big on predictions, but my guess for 2007 is pretty close to yours...except: If the market can hold it's ground until the end of the year I'll predict a 15% to 20% hit on the S&P sometime in the first half. The fed will begin cutting by early Q3.
clarification: if the market can hold it's ground the rest of THIS YEAR.
Since my crystal ball remains decidedly cloudy I'll make no prediction but only add that a correction is necessary to clear out dross -- e.g., everything from condos on the SE Atlantic shore to second and third tier financial assets (and countries) became overbought as everyone tried to maximize return with all the excess money/credit sloshing around the globe -- so my wish is for a nice fast and steep correction, over soon and with a lovely bounce at the end; I would prefer not to see something like '73-74 thank you very much.
Regardless of when or how it happens, risk must become appropriately priced; e.g., predicting a market will be up X% is a positive prediction if the risk of loss is less than X but negative if the risk of loss is greater.
i know this comes up every now and then, but i am not clear on it, so please bare with me.
If the market goes up 20%, you will be ok with that, because you will be close to it... i get that.
my question, if the market is down the 3-4% you predict, will you also be close to that? or is your goal to match the market if it goes up and beat it if it goes down?
Models this week:
Timing Score = 0.5
60% long 40% cash
Global Allocation - of long positions
MSCI EAFE Index 30%
MCCI Emerging Markets Index 40%
Russell 3000 Index - U.S. 30%
US Sector Ranks
U.S. Telecommunications 6.5
U.S. Real Estate 5.0
U.S. Financials 4.5
Mid Cap Value 3.0
U.S. Utilities 2.5
U.S. Consumer Goods 2.5
U.S. Consumer Services 2.5
Top Intl. ETFs
MSCI Spain Index Fund 3
MSCI Mexico Index Fund 3
MSCI Singapore Index Fund 3
MSCI Sweden Index Fund 3
FTSE/Xinhua China 25 Index Fund 3
S&P Latin America 40 Index Fund 3
MSCI Malaysia Index Fund 3
MSCI Austria Index Fund 3
MSCI Emerging Markets Index Fund 3
MSCI Brazil Index Fund EWZ 3
Regions and Misc Asset Class Ranks
S&P Latin America 40 Index Fund 4.0
FTSE/Xinhua China 25 Index Fund 4.0
MSCI Pacific ex-Japan Index Fund 4.0
MSCI EMU Index Fund 3.0
MSCI Emerging Markets Index Fund 3.0
streetTRACKS DJ Wilshire REIT 2.0
S&P Europe 350 Index Fund 2.0
MSCI EAFE Value Index Fund 2.0
http://marketthoughts.com/zs20051229.html
Between +11.7% and +13.4%. See the first paragraph on Part I.
Models are predicting a stronger year in 2007 than in 2006. We shall see.
Question to tom k or Roger,
What is definition of the rank score?
Thank you,
CA
tom k will have to answer that one for you.
thanks for the interesting link, Bill.
CA, rank/score is a little different for each model, but basically higher is better.
US Sectors - Sectors get points for momentum and other historical factors (economic cycle, yield spread, seasonality, OB/OS levels, etc.
Intl - Pure momentum model during the past 3, 6, and 12 months. ETFs with a score of 3 were a top performer for all three periods.
Regions/Asset classes - Again, a pure momentum model. 4 periods: 30 days, 90 days, 180 days, & 253 days.
tom k and roger,
Thank you and have a Happy New year!
CA
Thank you for the mention. I did have a heck of a year. In addition to making the 1421 S&P call, I also made big bets on CAL, AMR and a number of other stocks that did extremely well. I even overloaded tech and consumer cyclicals right at the turn. Aggressive accounts were up 70%.
I remain wildly bullish on the market. My S&P call is 1650! Perhaps, more interesting is my belief that the 10-year will hit a low of 3.7% to 3.9% before the market strength suprises. Commoditity prices, including oil, will continue to decline, inflation rates will be low with wages rising less than 3% on the year. The economy will accelerate during the second half after a relatively mild slow down. Outsourcing of production to Asia will continue.
Corporate profits may dip down enough to provide a good scare but then will return to these historic levels.
I am even more concerned about emerging markets than you. US investors have poured their 401-K's into these high flyer's. Higher Japanese short rates will cut off the carry trade and leave these emerging markets starved for capital. Emerging markets will do a lot of business but will struggle to make profits off it.
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