SubscribeTDI Episode 59: Profiting from the MSN Strategy Lab
June 2, 2008
Strategy Lab Panel: Robert Walberg, Kelly Wright, Vad Yazvinski, Ken Kam, John Resse and Ron Prichard
We review each of the strategies and the specific ways in which the strategies work as well as stock picks and pans. From Screening on a quantitative basis to contrarian investing strategies and back, this episode has a great deal of ideas that will help you profit.
We yammer about Marijuana legalization and the Democrats looking strong. Then, we explore how that is going to effect your portfolio. Good clean fun…
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Ron Prichard is investing editor at MSN Money and runs Strategy Lab, a ten-year-old stock-picking game in which a rotating cast of top investors try to beat each other and the market while documenting their every move. Mr. Prichard is a long-time journalist and has written and edited for the Eastside Journal in Bellevue, Washington, as well as several Gannett newspapers including the Westchester (NY) Journal News and USA Today. He is a graduate of California State University in Long Beach.
John Reese is the founder and CEO of Validea.com, a leading investment research Web site, and Validea Capital Management, an SEC-registered investment advisory firm that manages money for high net worth investors and institutions. Reese also utilizes his stock selection system to sub-advise two mutual funds offered to Canadian investors: Omega Consensus American Equity and Omega Consensus International Equity funds. He holds two U.S. patents for his inventions in the area of automated stock analysis and is the author of “The Market Gurus: Stock Investing Strategies You Can Use from Wall Street’s Best.” John holds an electrical engineering degree from MIT and an MBA from the Harvard Business School.
Robert Walberg is a financial writer based in Chicago who has been a regular MSN Money columnist and contributor to the stock-portfolio Strategy Lab. He was formerly chief equity analyst at Briefing.com and ran for Congress in 1994.
Kelley Wright is Chief Investment Officer and portfolio manager at IQ Trends Private Client Asset Management, a registered investment advisory company. Additionally, he is Managing Editor of the Investment Quality Trends newsletter. Kelley’s interest in stocks and investing was the result of his relationship with his grandfather, a small business owner whose investment philosophy was formed by his experiences during the Great Depression. With everyday life as a classroom, Kelley learned the building blocks of business and how to discern quality offered at good value. From construction sites to the family vegetable garden the experience of one generation was passed with love to the next Kelley is an active lecturer nationwide, a participant in the MSN Money Strategy Lab, and frequent guest on both television and radio. He has been published by BARRON’S, BOTTOM LINE PERSONAL, BUSINESSWEEK, FORBES, THE ECONOMIST, MARKETWATCH.COM, and many others.Kelley is the author of Dividends Still Don’t Lie, slated to be published in 2008.
Vad Yazvinski likes buying stocks that offer growth at a reasonable price. He does not tolerate losing positions for too long.To sum it up, he is a permanent student of economics and of the investing world who is not only unafraid of challenges but who spends his free time looking for them. And I intend to stay that way, because, as the quote I cited above says, I know that while I might not be able to change my past, it is certainly within my powers to make a brand new ending.
Ken Kam is the CEO of Marketocracy.com. Ken believes that Wall Street analysts really don’t know a lot about the companies they cover. Warren Buffett likes to say that in the short term, the market is a voting machine. If the people who have the most votes (because their opinions drive billions of dollars of capital) are not the most knowledgeable about the company, how can a stock’s price end up being priced exactly right all the time? Ken also asks, “Our financial future depends on the investing skills of the people you choose to help you manage your money…Do you have the right people?
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Indications of Interest for The Disciplined Investor Fund, Click Here
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We discussed a heap of stocks in this episode: Disney (DIS), Intel (INTC), Applied Materials (AMAT), Budweiser (BUD), Altria (MO), Nvidia (NVDA), Synaptics (SYNA), MasterCard (MA), Bank of America (BAC), Sigma-Aldrich (SIAL), ELAN (ELN). Abbott Labs (ABT), Wellpoint (WLP), Johnson & Johnson (JNJ), Nvidia (NVDA), Banco Bilboa (BBV), Dryships (DRYS), Rio Tinto (RIO)
Bernanke’s Magic Hat
March 14, 2008
“The dogmas of the quiet past are inadequate to the stormy present. The occasion is piled high with difficulty, and we must rise with the occasion. As our case is new, so we must think anew, and act anew. We must disenthrall ourselves, and then we shall save our country.” Lincoln’s Second Annual Message to Congress, December 1, 1862.
Just as President Abe Lincoln inherited a country at a historic crossroad, so has Chairman Ben Bernanke. Lincoln thought well outside the box by and was able to reach into his hat-o-tricks and pullout some magic. Fortunately, his efforts eventually united a broken and disparate country laying the foundation for greatness. Now it is Mr. Bernanke’s turn.
So far, Academic Ben has shown some magic of his own. Reaching deep inside, we see that his hat-o-need-a-miracle is full of all sorts of wondrous solutions…..From traditional rate cuts to tapping the lesser known discount window and all the way back again, the Fed Chief has been wrangling with just how to get some breathing space between today and an eventual foreclosure of the good-ole U. S. of A. In an effort of global proportions, the latest move to avert an all out economic nosedive was to bring together a global consortium of governments in the hopes of providing the liquidity to allow for the banking sector to work its way through the short term. The unfortunate fact is that it appears as if Mr. Bernanke is not convinced that the U.S. can actually pull this one off alone.
According to Bloomberg reports,
In a Florida speech directed to bankers last week, he Fed Chairman Ben Bernanke requesting that lenders “forgive portions of mortgage debt held by homeowners at risk of defaulting.”
This is not a good sign as it is smelling like our sugar-daddy is running out of ideas and we dare say…options. This last move was historic in size and depth. “What else is does Bernanke have in his tall hat?” is weighing on the minds of many investors. Here is a novel idea…how about an immediate pullout of U.S. troops from IRAQ which, at last report, was costing us….(from nationalpriortities.org )
There is a growing concern that there will be a failure and that the latest moves are set to help avert the impending reality. Rumors aside, the probability is growing that a major catastrophe is brewing and the longer the credit markets are locked-up, the higher the likelihood.
Do not confuse this and assume it is the rant of a perma-bear, looking to profit from scare tactics. Rather, I hope it is the voice of financial responsibility and the economic reality. We are still setting up for problems if this latest magic trick does not quickly do the job by acting like Super Drain-O in unclogging our financial plumbing.
What is left to be yanked out of Bernanke’s Hat? Perhaps rate cuts that will lower mortgage rates for the new legion of renters. As this would bring down the dollar’s value, we could find ourselves looking for Read more
Federal Reserve Actions: Goose Eggs
March 13, 2008
Remember that game we used to play as children? Now the Fed is playing: Cut, Cut, Cut, Cut, GOOSE, Cut, Cut - GOOSE!
Below is a great chart from Investor’s Business Daily that illustrates how the recent actions, policies and interventions have helped(?) the equity markets. While the Fed’s primary goal has been to restore liquidity to the credit markets, the collateral damage from the sub-prime and housing malignancy has negatively effected the dollar and equity markets. Nothing new here.
If we were grading the Fed on originality: A-
If we were to give a grade on effectiveness: D-
So far, as far as the market is concerned, the Fed Plan(s) have come up as Big Fat Goose Eggs !
Remarks from the March 4, Independent Community Bankers of America Annual Convention in Orlando, Florida that are rather frightening:
A recent estimate based on subprime mortgages foreclosed in the fourth quarter of 2007 indicated that total losses exceeded 50 percent of the principal balance, with legal, sales, and maintenance expenses alone amounting to more than 10 percent of principal.
50%? 50%? So, they are showing a 40% reduction in value for the subprime debt and another 10% for the miscellaneous administration.
With the time period between the last mortgage payment and REO liquidation lengthening in recent months, this loss rate will likely grow even larger. Moreover, as the time to liquidation increases, the uncertainty about the losses increases as well. The low prices offered for subprime-related securities in secondary markets support the impression that the potential for recovery through foreclosure is limited.
The loss rate will likely Read more
Jargon, People and Company Update – 2008
March 1, 2008
Jargon and other interesting phrases that we may soon find showing up in conversations … Don’t 
laugh because it really isn’t funny !
Terms
- Pizza Inflation
Single-Family Refrigerator Box
Extended Family Dwellings
Right-Wing Terrorism
Florida Condo Swamps
ARM-LEG-BODY Mortgage
No-Fault Foreclosures
Darwin’s Theory of Econolution
Maximum Wage
Crash Landing
The Oil-Standard
Mandatory Population Thinning
“I Will Work for Euros…”
BalmerGate
Multi-Generational Mortgages
The November Poll Panic
The Stupidity Tax
Commodity Hoarding
In-Sourcing
Living Room Vacations
Write-In-Ballot-Craze
The Great Alaskan Migration
Section-8 Bankruptcies
WikiGovernment
Carpartments
Companies
- Lunar Development Corp.
FBMRA - The Federal Banking and Mortgage Rollup Agency
Macbook Airlines
Lehman, Citi, Goldman Brothers et al
Google 4 for 1 Reverse-Split
The MBIA/Nielson Merger
The Arson Training Institute
Yahoo?
iFlix
MyFace
People
- Vice-President Winfrey
Suze-Ramsey Visa Card
Governor Cramer
Senator Spears
Treasury Secretary, Sheikh Mohammad bin Zayed Al Nahyan
Regis and Hillary LIVE!
Friends of Limbaugh W.
Chairman Greenspan
What did I miss ?
(in no particular order)
Another important week for ECO Reports
February 17, 2008
Another week, another report. Once again it is going to be a fun ride.
Housing starts are going to be a key concern and looking at a consensus that matches prior reports, it is clear that most are very worried about the fact that there is little buying activity. The same day, building permits are revealed for January. That will be a double-whammy for the markets. If there these numbers come in anywhere near expectation (above or below), we are apt to see nice rally.
One the proverbial other hand, disappointment will be painful for Mr. Dow.
Then there is the CPI. Besides the fact that it is reported on the same day as the housing indicators, on Feb 20, the CPI will show if Benanke has been right all along in calling for slight inflationary pressures. The problem is that he realizes that some of the inflationary pressure is due to the massive exports we are experiencing. Of course these would not be as intense if we had a stronger dollar, but that is old news.
Balancing the hope for consumers and home buyers versus a need to keep inflation down is the job of the FED and these days it is more difficult than ever. It would seem that one thing is for sure…unless he has a few more tricks up his sleeve, we are going to be in for a long and tough 2008.
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