• 01 Mar
    Value That’s Measured In Millions

    Value That’s Measured In Millions

    • My goal for what I write on Investiv Daily is to increase yearly returns by 4 percentage points for those who want to remain invested in the U.S. and diversified across sectors, by 8 percentage points for those who want the same but dare to go international, and by 12 or more percentage points for those who want to look at specific stock investments.
    • History, statistics, the Buffetts of the world, macroeconomics, cycles, etc., show that returns of above 16% on an annualized basis are possible, so why should you settle for average?
    • The current investing environment praises index or average investing. However, I would wait for a complete business and market cycle to pass before praising an investment strategy. It’s fun how quickly people have forgotten about 2001 and 2009.

    Introduction

    You probably know that I’ve been writing here on Investiv Daily for a while now. Apart from the content and commentary that I publish here, I have a very specific goal in mind. My goal is to eliminate the word “average” from your returns and without increasing your risk. More →

  • 28 Feb
    The Snapchat IPO Tells Me Two Things

    The Snapchat IPO Tells Me Two Things

    • The market is greedy and liquid. This is a very dangerous combination as valuations don’t matter, but what’s cool does.
    • It’s easy to forget that, in investing, it’s more important not to lose than to make it big, and by playing the greater fool roulette, investors can lose a lot.
    • It’s a mystery how some companies that are cool and with $2.2 billion in net profits trade at valuations of 16.5.

    Introduction

    Reuters reported that the Snapchat Inc. IPO is oversubscribed as potential buyers have been plentiful at lunches in New York and London during last week’s road show. Snapchat plans to sell 200 million non-voting shares of which 55 million are from company insiders for an estimated $3.2 billion which would bring the company’s market capitalization to over $22 billion. More →

  • 27 Feb
    A Value Investment Philosophy

    A Value Investment Philosophy

    • If you want to succeed in investing for the long term, your focus has to be on potential losses, only later should you look at potential gains.
    • Risk can’t be determined from historical data, it only depends on the price paid.
    • Risk avoidance is compatible with investing success when the correct approach is used.

    Introduction

    Given the great response, I’ll continue with breaking down Seth Klarman’s legendary book Margin of Safety.

    You can read my introduction to Klarman’s Margin of Safety here, my review of chapter one, Where Most Investors Stumblehere, my review of chapter two, The Nature of Wall Street Works Against Investorshere, and The Institutional Performance Derby: The Client Is the Loser chapter, here.

    Today, we’ll focus on the second part of the book, A Value Investment Philosophy.  More →

  • 26 Feb
    Fear and Greed: The Gremlins That Guzzle Your Money

    Fear and Greed: The Gremlins That Guzzle Your Money

    No matter how experienced you are as an investor, or how much money you’re working with, I’m willing to bet you started out in about the same place I did: you decided to buy that first stock because something, or someone, convinced you it was a good idea. Maybe your were acting on a stock tip from a close friend, or you saw Jim Cramer talk about how much he liked a stock. Either way, I’m willing to bet that initial decision was driven more by your emotion than it was on your ability to analyze the market or evaluate the stock itself. More →

  • 24 Feb
    Goldman Sachs Is Probably Right But Is It Worth The Risk?

    Goldman Sachs Is Probably Right But Is It Worth The Risk?

    • Goldman Sachs recommends being overweight U.S. equities because of expected loose fiscal policies and because, as they have stated, valuations don’t matter.
    • Goldman expects a 3% yearly return on a moderate risk portfolio.
    • I’ll touch on what the average Goldman client is risking for their 3% yearly return.

    Introduction

    Goldman Sachs (NYSE: GS) recently released its 2017 market outlook. It shouldn’t be a surprise that the outlook is positive. It’s in their interest for stocks and the economy to continue to thrive as GS makes its money from IPO commissions, asset management fees, etc.

    Despite the conflict of interest, their positive outlook will most probably be correct at the end of 2017, but there is something more important than being right or wrong on a yearly forecast.

    Today we’ll discuss Goldman’s view and analyze the possible impacts on our portfolios. More →

  • 23 Feb
    Bubble, Crisis, Bubble, Crisis – Debunking The Chinese Real Estate Sector

    Bubble, Crisis, Bubble, Crisis – Debunking The Chinese Real Estate Sector

    • The Chinese government is controlling the real estate market and allowing short, two-year boom bust cycles.
    • Western investors don’t understand China and see either a bubble or a crash.
    • The best way to invest is to seize the wild market swings created by such erratic behavior.

    Introduction

    The question we would all like to know the answer to is this: is the Chinese real estate market in a bubble?

    If it is, any kind of burst would create a credit crisis, lower economic growth, and quickly spill over first on global financial markets, and consequently onto the global economy.

    There is no consensus on whether or not Chinese real estate is in a bubble. I’m going to describe both perspectives to give you the best information possible for China and Chinese real estate related investments. More →

  • 22 Feb
    What Will The Economic World Look Like In 2050?

    What Will The Economic World Look Like In 2050?

    • Emerging markets will be the economic leaders of the world.
    • Investment returns are related to economic performance, so it’s wise to be internationally diversified.
    • However, diversifying just to diversify is the biggest mistake you can make as emerging markets are full of risk.

    Introduction

    PricewaterhouseCoopers (PwC) just released its report on what the economic world will look like in 2050. You might wonder what that has do to with your investment returns as 2050 is 33 years from now, but it has everything to do with your returns if your investment horizon is longer than a few years because these global trends that will shape the world up to 2050 will also be the trends that will shape your portfolio returns. More →

  • 21 Feb
    Buffett Put $12 Billion On Stocks, But He Didn’t Buy Into <i>This</i> Market

    Buffett Put $12 Billion On Stocks, But He Didn’t Buy Into This Market

    • Stocks grew on positive sentiment after Buffett disclosed his optimism and spent $12 billion.
    • His purchases included Apple, and an extremely cheap sector.
    • Passive investing without thinking is what allows for such heterogeneity in valuations. For investors like Buffett, it’s easy money.

    Introduction

    At the end of January, market bulls rejoiced when Warren Buffet disclosed in a Charlie Rose interview that he had bought $12 billion of stocks since Trump’s election. Since then, the market has jumped another 3% on positive sentiment as even the greatest low risk investors of them all is buying into this market.

    A few days ago, however, Berkshire Hathaway disclosed—in their obligatory holding statement—what Buffett actually bought. This, of course, hasn’t been as publicized as has the fact that he bought $12 billion of stocks, but as always, journalists prefer to focus more on what’s sexy than on what’s important.

    Let’s see if we can learn something from what the Oracle of Omaha has been buying in this market which is constantly breaching all-time highs. More →

  • 20 Feb
    Sell Your ‘High Yield’ Immediately – Aggressive Traders Get Short

    Sell Your ‘High Yield’ Immediately – Aggressive Traders Get Short

    • Due to higher oil prices, ‘high yield’ bond yields are approaching historical lows while interest rates and inflation are increasing. Investors should be grateful for the amazing opportunity to unload.
    • ‘High yield’ ETFs have grown from 0% to 10% of the total fixed income ETF market in less than 10 years.
    • Apart from rising interest rates, illiquid ‘high yield’ primary markets in relation to the highly liquid secondary ETF markets signal potential Armageddon as there will be no buyers when the ETF trend reverses.

    Introduction

    I usually look for investments where the risk is low and return is high as asymmetric risk reward situations provide the highest and safest returns. Today I’m going to do the opposite, discuss a high risk low reward investment. If you own or are attracted to higher yields, or want a short play, this article is for you. More →

  • 19 Feb
    Copper May Be The Strongest New Bull Market Over The Coming Decade

    Copper May Be The Strongest New Bull Market Over The Coming Decade

    The Escondida mine problems are only the tip of the iceberg for Copper, which appears to be in a bit of a panic since workers of BHP Billiton Ltd.’s Escondida copper mine in Chile started an indefinite strike on February 9, forcing a force majeure declaration on its shipments.

    Adding more fuel to the fire is a one-month delay to exports at Indonesia’s Grasberg mine when Freeport-McMoRan suspended copper concentrate output while in negotiations with the government over the terms of its mining permit which has expired. More →

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