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วันจันทร์ที่ 7 มกราคม พ.ศ. 2562
Dow Jones Drops Nearly 700 Points; When Long-Term Apple Holders Should Sell
A big haircut in the quarterly revenue outlook for Apple sent U.S. shares tail-spinning in what has become a common refrain in stocks today for the past few months. The Dow Jones industrial average and the Nasdaq composite acted as co-leaders of the sell-off, each falling 2.8% to 3% and ending practically at the session's low.
The S&P 500, which dropped 6.2% (excluding dividends) in 2018, sank more than 2.4%. Intense buying in defensive areas of the market — think dairy and meat, property REITs, gold mining and telecom services — provided little solace for most investors. The Dow Jones utility average rose nearly 0.1% after falling almost 1.7% on Wednesday.
Dow Jones industrial component Verizon Communications (VZ), formerly on IBD Leaderboard, edged up 0.3%. The stock is trying to reclaim its rising 50-day moving average. Watch for a potential new base to form.
Curiously, small caps performed relatively better but still caved in price. The Russell 2000 fell 1.3%. The S&P SmallCap 600 fell 1.8%, snapping a five-day winning streak.
Volume ran higher vs. the same time Wednesday on both main exchanges, according to early data, signifying heavy institutional profit-taking.
Perhaps institutions are selling shares of multinational corporations much harder, given the clear evidence mounting in China of a growth slowdown. U.S. and China have called a 90-day truce on the trade war and have until March 1 to find a way to end the festering battle on import tariffs.
Apple Leads Dow Jones Lower
Apple gapped down at the open and remained near session lows, falling as much as 10%. The iPhone, iPad, Macbook and digital services giant cut its revenue guidance for the just-ended fiscal first quarter to $84 billion, down from $91 billion. This means Apple's top line is likely to fall nearly 5% on a year-over-year basis.
Such a drop in the top line would be the first since a 9% decline in the fiscal fourth quarter that ended in September 2016.
The Street, before the bombshell news from CEO Tim Cook shared late Wednesday, had been expecting fiscal Q1 profit to rise 20% to $4.65 a share. That comes after adjusted EPS gains of 18%, 24%, 16%, 30%, 40% and 41% in the prior six quarters. The consensus revenue growth forecast for the December-ended holiday quarter prior to the revised forecast came in at $91.49 billion, up 4%.
As the Stock Market Today column had noted frequently in the past, Apple began its impressive run after staging a clean breakout from a first-stage (or early stage) cup with handle on Jan. 6, 2017. The buy point at the time: 118.12. Since that breakout, the megacap tech rallied as much as 97% to its peak of 233.47 on Oct. 3 last year. Along the way, Apple built a series of additional bases, such as the flat base, and gentle pullbacks to the 10-week moving average. These actions presented new buy points along Apple's 21-month price run.
This breakout coincided with a turnaround in Apple's fundamentals. Exactly two years ago, Apple had reported its first quarter of year-over-year gains in both profits (up 2%) and sales (up 3%) in four quarters.
The complexion of Apple's chart action completely changed during the week ended Nov. 2. The stock cleaved through its 10-week moving average near 220.57, falling more than 4% for the week in volume that shot up 51% above its 10-week average. Apple hardly tried to rally back above this key support-and-resistance level; thus, a key IBD sell signal was born.
Apple Stock Strategy Now: Avoid A Full Round Trip Of Profits
Given the strong advance since that breakout, Apple shareholders who bought at the proper breakout point must draw a line in the sand. A solid gain should never be allowed to turn into a loss.
At the day's low of 142.08, Apple has now fallen 39% from a 233.47 peak.
Typical base patterns such as the cup with handle and double bottom generally show a decline of no more than 30% to 33%. But this often is the case in a bull market. With the bears in control, one can expect some corrections in top growth stocks to exceed that range. Breakouts from deep bases do work, but the probabilities are lower.
วันพฤหัสบดีที่ 14 มิถุนายน พ.ศ. 2561
Joel Greenblatt: Career in finance
Career in finance[edit]
Gotham Capital[edit]
In 1985, Greenblatt started a hedge fund, Gotham Capital, with $7 million, most of which was provided by junk-bond king Michael Milken.[3] Through his firm Gotham Capital, Greenblatt presided over an impressive annualized return of 40% from 1985 to 2006.[4]
Value Investors Club[edit]
Greenblatt co-founded a website with John Petry called the Value Investors Club,[5] where investors approved through an application process exchange value and special situation investment ideas. Membership is capped at 250 members and considered highly prestigious.[6] A 2012 academic study showed that the recommendations of members do in fact appear to generate significant abnormal profits.[7] The club awards $5000 bimonthly to members who provide the best advice.[8]
Magic formula investing[edit]
His book The Little Book that Beats the Market introduced an investment strategy of "magic formula investing", which is a method for determining which stocks to buy: "cheap and good companies" with a high earnings yield and a high return on invested capital. His strategy is featured in The Guru Investor by John P. Reese.
Formula Investing[edit]
In October 2009 he launched Formula Investing,[9] an online money management firm that follows the investment strategy described in his New York Times bestselling book The Little Book That Beats the Market. Formula Investing is a money management firm that uses a proprietary stock-screening system and a disciplined approach to manage portfolios of value stocks. The firm offers its services to individual investors and institutions and to registered investment advisors, who can use Formula Investing as a sub-advisor.
Formula Investing uses a system that determines portfolio selections based on a combination of their relative cheapness and quality, as measured by earnings yield and return on capital. Formula Investing allows money to be managed in a disciplined manner that removes factors, like excess emotion and future projections, that often lead to bad investment results.
John C. Bogle: Investment philosophy[
Investment philosophy[edit]
Bogle's innovative idea was creating the world's first index mutual fund in 1975. Bogle's idea was that instead of beating the index and charging high costs, the index fund would mimic the index performance over the long run—thus achieving higher returns with lower costs than the costs associated with actively managed funds.
Bogle's idea of index investing offers a clear yet prominent distinction between investment and speculations. The main difference between investment and speculation lies in the time horizon. Investment is concerned with capturing returns on the long-run with lower risk, while speculation is concerned with achieving returns over a short period of time. Bogle believes this is an important analysis to be taken into account as short-term, risky investments have been flooding the financial markets.[10]
Bogle is known for his insistence, in numerous media appearances and in writing, on the superiority of index funds over traditional actively managed mutual funds. He contends that it is folly to attempt to pick actively managed mutual funds and expect their performance to beat a low-cost index fund over a long period of time, after accounting for the fees that actively managed funds charge.[8]
Bogle argues for an approach to investing defined by simplicity and common sense. Below are his eight basic rules for investors:[11]
- Select low-cost funds
- Consider carefully the added costs of advice
- Do not overrate past fund performance
- Use past performance to determine consistency and risk
- Beware of stars (as in, star mutual fund managers)
- Beware of asset size
- Don't own too many funds
- Buy your fund portfolio - and hold it
Charlie Munger: Personal life
Personal life[edit]
From his first marriage to Nancy Huggins,[3] Munger had three children, Wendy (a former corporate lawyer and trustee of Stanford University[20]), Molly (a civil rights attorney and funder of a ballot initiative to raise California taxes for public education.[21]) and Teddy (deceased, leukemia, age 9).
From his marriage to Nancy Barry, Munger is a father of four children—physicist and Republican activist Charles T. Munger Jr., Emilie Munger Ogden, Barry A. Munger and Philip R. Munger—and two stepchildren: William Harold Borthwick and David Borthwick.[22] Nancy Barry Munger died in 2010.[23]
Munger enjoys architecture and has designed multiple buildings, including dormitories at Stanford University and University of Michigan as well as the house he currently inhabits.[24]
Charlie Munger: Investment philosophy
Investment philosophy[edit]
"Elementary, worldly wisdom"[edit]
In multiple speeches, and in the book Poor Charlie's Almanack, Munger has introduced the concept of "elementary, worldly wisdom" as it relates to business and finance. Munger's worldly wisdom consists of a set of mental models framed as a latticework to help solve critical business problems.[3]
Munger, along with Buffett, is one of the main inspirations behind the book Seeking Wisdom: From Darwin to Munger. Author Peter Bevelin explained his key learnings from both Munger and Buffett in a 2007 interview: "How to think about businesses and investing, how to behave in life, the importance of ethics and honesty, how to approach problems but foremost how to reduce the chance of meeting problems." Bevelin stated that previously, he "was lacking the Munger ability to un-learn my own best-loved ideas".[10]
Munger states that high ethical standards are integral to his philosophy; at the 2009 Wesco Financial Corporation annual meeting he said, "Good businesses are ethical businesses. A business model that relies on trickery is doomed to fail."[11] During an interview and Q&A session at Harvard-Westlake School on January 19, 2010, Munger referred to American philosopher Charles Frankel in his discussion on the financial crisis of 2007–08 and the philosophy of responsibility. Munger explained that Frankel believed:
Munger is critical of cryptocurrencies, referring to Bitcoin as "poison".[13] In early 2018 he likened bitcoin to "harvested baby brains" in an interview with Yahoo Finance.[14]
Lollapalooza effect[edit]
Munger uses the term "Lollapalooza effect" for multiple biases, tendencies or mental models acting at the same time in the same direction. With the Lollapalooza effect, itself a mental model, the result is often extreme, due to the confluence of the mental models, biases or tendencies acting together, greatly increasing the likelihood of acting irrationally.[15]
During a talk at Harvard in 1995 entitled The Psychology of Human Misjudgment, Munger mentions Tupperware parties and open outcry auctions, where he explained "three, four, five of these things work together and it turns human brains into mush,"[16][17] meaning that normal people will be highly likely to succumb to the multiple irrational tendencies acting in the same direction. In the Tupperware party, you have reciprocation, consistency and commitment tendency, and social proof. (The hostess gave the party and the tendency is to reciprocate; you say you like certain products during the party so purchasing would be consistent with views you've committed to; other people are buying, which is the social proof.) In the open outcry auction, there is social proof of others bidding, reciprocation tendency, commitment to buying the item, and deprivation super-reaction syndrome, i.e. sense of loss. The latter is an individual's sense of loss of what he believe should be or is his. These biases often occur at either conscious or subconscious level, and in both microeconomic and macroeconomic scale.
Charlie Munger: Early life and education
Early life and education[edit]
Munger was born in Omaha, Nebraska. As a teenager he worked at Buffett & Son, a grocery store owned by Warren Buffett's grandfather.[2]
After enrolling in the University of Michigan, where he studied mathematics, he never returned to Omaha except to visit.[3]In early 1943, a few days after his 19th birthday, he dropped out of college to serve in the U.S. Army Air Corps, where he became Second Lieutenant. He continued his studies in meteorology[4] at Caltech in Pasadena, California, the town he was to make his home.[3]
Through the GI Bill he took a number of advanced courses through several universities; without an undergraduate degree, he entered Harvard Law School and graduated magna cum laude with a J.D. in 1948. At Harvard he was a member of the Harvard Legal Aid Bureau.[4][5]
In college and the Army he developed "an important skill": card playing. “What you have to learn is to fold early when the odds are against you, or if you have a big edge, back it heavily because you don't get a big edge often. Opportunity comes, but it doesn't come often, so seize it when it does come.”
Charlie Munger
Charles Thomas Munger (born January 1, 1924) is an American investor, businessman and philanthropist. He is vice chairman of Berkshire Hathaway, the conglomerate controlled by Warren Buffett; Buffett has described Munger as his partner. Munger served as chairman of Wesco Financial Corporation from 1984 through 2011. He is also chairman of the Daily Journal Corporation, based in Los Angeles, California, and a director of Costco Wholesale Corporation
Benjamin Graham: Legacy
Legacy[edit]
Graham is considered the "father of value investing,"[1] and his two books, Security Analysis (1934) with David Dodd, and The Intelligent Investor (1949) defined his investment philosophy, and especially what it means to be a value investor. His ideals regarding investor psychology, minimal debt, buy-and-hold investing, fundamental analysis, concentrated diversification, buying within the margin of safety, activist investing, and contrarian mindsets went on to be utilized by those influenced by him. Arguably, his most famous student was Warren Buffett, who as of January 2018, was the third wealthiest person in the world.[19] According to Buffett, Graham used to say that he wished every day to do something foolish, something creative, and something generous.[20] And Buffett noted, Graham excelled most at the last.[21]
While many value investors have been influenced by Graham, his most notable investing disciples include Charles Brandes, as well as those noted above: Schloss, Kahn, Klarman, and Ackman.[22][23]
Alongside his revolutionary work in investment finance, Graham also made significant contributions to economic theory. Most notably, he devised a new basis for both U.S. and global currency.[24]
Benjamin Graham: Personal life
Personal life[edit]
According to The Snowball, after his son's death, Graham had an affair with the deceased's girlfriend Marie Louise "Malou" Amingues (who was several years older than his son[17]) and used to travel to France frequently to visit her. He later separated from his wife, Estey, after she refused his offer to split their residence six months each year between New York and France. Amingues was content to live with Graham without marriage.[18]
On September 21, 1976, Graham died in Aix-en-Provence, France, at the age of 82.
Benjamin Graham:
Investment and academic career[edit]
His first book, Security Analysis, with David Dodd, was published in 1934.[6][7][8][9][10] Security Analysis and The Intelligent Investor, published in 1949 (4th revision, with Jason Zweig, 2003), are his two most widely acclaimed books. Warren Buffett describes The Intelligent Investor as "the best book about investing ever written."[11]Graham exhorted the stock market participant to first draw a fundamental distinction between investment and speculation. In Security Analysis, he proposed a clear definition of investment that was distinguished from what he deemed speculation. It read, "An investment operation is one which, upon thorough analysis, promises safety of principal and an adequate return. Operations not meeting these requirements are speculative."[1
Graham wrote that the owner of equity stocks should regard them first and foremost as conferring part ownership of a business. With that perspective in mind, the stock owner should not be too concerned with erratic fluctuations in stock prices, since in the short term the stock market behaves like a voting machine, but in the long term it acts like a weighing machine (i.e. its true value will be reflected in its stock price in the long run). Graham distinguished between the passive and the active investor. The passive investor, often referred to as a defensive investor, invests cautiously, looks for value stocks, and buys for the long term. The active investor, on the other hand, is one who has more time, interest, and possibly more specialized knowledge to seek out exceptional buys in the market.[13] Graham recommended that investors spend time and effort to analyze the financial state of companies. When a company is available on the market at a price which is at a discount to its intrinsic value, a "margin of safety" exists, which makes it suitable for investment.
Graham wrote that investment is most intelligent when it is most businesslike. By that he meant that the stock investor is neither right nor wrong because others agreed or disagreed with him; he is right because his facts and analysis are right.[14] Graham's favorite allegory is that of Mr. Market, a fellow who turns up every day at the stock holder's door offering to buy or sell his shares at a different price. Usually, the price quoted by Mr. Market seems plausible, but occasionally it is ridiculous. The investor is free to either agree with his quoted price and trade with him, or to ignore him completely. Mr. Market doesn't mind this, and will be back the following day to quote another price. The point is that the investor should not regard the whims of Mr. Market as determining the value of the shares that the investor owns. He should profit from market folly rather than participate in it. The investor is best off concentrating on the real life performance of his companies and receiving dividends, rather than being too concerned with Mr. Market's often irrational behavior.[15]
Graham was critical of the corporations of his day for obfuscated and irregular financial reporting that made it difficult for investors to discern the true state of the business's finances. He was an advocate of dividend payments to shareholders rather than businesses keeping all of their profits as retained earnings. He also criticized those who advised that some types of stocks were a good buy at any price, because of the prospect of sustained stock price growth, without a good analysis of the business's actual financial condition. These observations remain relevant today.[16]
His contributions spanned numerous fields, one of which was fundamental value investing
Benjamin Graham: Early life
Early life[edit]
Graham was born Benjamin Grossbaum in London, England,[2] to Jewish parents.[3][4] He moved to New York City with his family when he was one year old. After the death of his father and experiencing poverty, he became a good student, graduating as salutatorian of his class at Columbia. He declined an offer to teach English, mathematics, and philosophy, choosing instead to take a job on Wall Street, where he eventually started his Graham-Newman Partnership. Early on, Graham made a name for himself with "The Northern Pipeline Affair, " involving John D. Rockefeller.
Benjamin Graham
Benjamin Graham
Benjamin Graham (/ɡræm/; né Grossbaum; May 9, 1894 – September 21, 1976) was a British-born American investor, economist, and professor. He is widely known as the "father of value investing,"[1] and wrote two of the founding texts in neoclassical investing: Security Analysis (1934) with David Dodd, and The Intelligent Investor (1949). His investment philosophy stressed investor psychology, minimal debt, buy-and-hold investing, fundamental analysis, concentrated diversification, buying within the margin of safety, activist investing, and contrarian mindsets.
After graduating from Columbia University at age 20, he started his career on Wall Street, eventually founding the Graham-Newman Partnership. After hiring his former student and future manager of Berkshire Hathaway, Warren Buffett, he took up teaching positions at his alma mater, and later at Anderson School of Management at the University of California, Los Angeles.
His work in managerial economics and investing has led to a modern wave of value investing within mutual funds, hedge funds, diversified holding companies, and other investment vehicles. Throughout his career, Graham had many notable disciples who went on to receive substantial success in the world of investment, including Buffett, who described him as the second most influential person in his life after his own father. Other such disciples were William J. Ruane, Bert Olden, Irving Kahn and Walter J. Schloss. In addition, Graham's thoughts on investing have influenced the likes of Seth Klarmanand Bill Ackman.
Peter Lynch: Wealth and philanthropy
Wealth and philanthropy
According to a 2006 Boston Magazine article, Lynch has an overall net worth of $352 million USD.[20]
Though he continues to work part-time as vice chairman of Fidelity Management & Research Co., the investment adviser arm of Fidelity Investments, spending most of his time mentoring young analysts, Peter Lynch focuses a great deal of time on philanthropy. He said he views philanthropy as a form of investment. He said he prefers to give money to support ideas that he thinks can spread, such as First Night, the New Year's Eve festival that began in Boston in 1976 and has inspired similar events in more than 200 other communities, and City Year, a community service program founded in Boston in 1988 that now operates in 14 locations.
The Lynches give money primarily in five ways: as individuals, through the Lynch Foundation, through a Fidelity Charitable Gift Fund, and through two charitable trusts.
The Lynches have made gifts as individuals, donating $10 million to Peter Lynch's alma mater, Boston College. BC, in turn, named the School of Education after the family.[21][19]
The Lynch Foundation, valued at $125 million, gave away $8 million in 2013 and has made $80 million in grants since its inception.[22] The Foundation supports education, religious organizations, cultural and historic organizations, and hospitals and medical research. Lynch was inducted into the Junior Achievement U.S. Business Hall of Fame in 1991.
Peter Lynch: Investment career
Fidelity[edit]
In 1966, Lynch was hired as an intern with Fidelity Investments partly because he had been caddying for Fidelity's president, D. George Sullivan, (among others) at Brae Burn Country Club in Newton, Massachusetts.[10][11] He initially covered the paper, chemical, and publishing industries, and when he returned after a two-year Army stint he was hired permanently in 1969. This time Lynch was charged with following the textiles, metals, mining, and chemicals industries, eventually becoming Fidelity's director of research from 1974 to 1977.
Magellan Fund[edit]
In 1977, Lynch was named head of the then obscure Magellan Fund which had $18 million in assets. By the time Lynch resigned as a fund manager in 1990, the fund had grown to more than $14 billion in assets with more than 1,000 individual stock positions.[12]
From 1977 until 1990, the Magellan fund averaged a 29.2% return and as of 2003 had the best 20-year return of any mutual fund ever.[4][13] Lynch's achieved dollar successes in a range of stocks including (by order of profit achieved - source is Beating the Street): Fannie Mae, Ford, Philip Morris, MCI, Volvo, General Electric, General Public Utilities, Student Loan Marketing, Kemper, and Lowe's.
วันพุธที่ 13 มิถุนายน พ.ศ. 2561
Warren Buffett: Tobacco
Tobacco
During the RJR Nabisco, Inc. hostile takeover fight in 1987, Buffett was quoted as telling John Gutfreund:[180]
Speaking at Berkshire Hathaway Inc.'s 1994 annual meeting, Buffett said investments in tobacco are:[181]
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