"Investing is a business and should be treated as such. That means putting in the time and doing your homework. There are no short cuts in the stock market"
This past weekend I was in Michigan at Hillsdale College to attend the graduation ceremonies for my daughter Trinity. I won’t prattle on, but it was a beautiful day, both literally and figuratively. Yes, I got misty, and perhaps even shed a tear or two, mostly of pride and joy, but also because of the realization that she’s not coming home. Well, she will for about two months and then she’s off to Arizona to start her teaching career and adult life. Isn’t it ironic that you spend years preparing your children to make their way in the world, and then you’re shocked when they set off to do just that. Ah, the joys of parenthood.
Now that I’m back in the “real” world, I see that nothing has changed: the real world is still nuts. It was such a delight to listen to Trinity and her friends discuss deep, meaningful subjects, such as the search for the true, the good, and the beautiful in the classic works of literature they had read, analyzed, and spent countless hours writing thoughtful, well-reasoned papers on. Then I get back to the office to cable “news” and CNBC to hear nothing but dreck – pure unadulterated dreck.
I mean seriously, how many hours a day can you spend discussing how to best trade Facebook, Amazon, Netflix, Google and Apple? Trading? Really? Do you really think Joe and/or Jane Sixpack is going to glean sufficient knowledge watching CNBC to actually “trade” successfully against the professionals? Let me tell you something folks, it isn’t going to happen.How about discussing something the average investor can actually benefit from, such as how to identify quality companies and to recognize when they offer good value? How about teaching folks about finding companies they can hold in their portfolio for years, with consistently rising profits and dividends? Where is the discussion about building long-term wealth as opposed to hitting the Lotto and becoming “wealthy?” You know, the sad part is there are investors that actually hang on every word of this nonsense. Lord have mercy, when did the world get so stuck on stupid?
Of course, the answer to these rhetorical questions is that they take discipline, patience and time, three things that don’t fit into a world that is hooked on immediate gratification. CNBC doesn’t talk about investing because it isn’t sexy, it doesn’t sell. No, what the folks who watch Money TV want is to have their notion, no, illusion is a better word, reinforced that they can trade like the pros and get rich.
I had a frat brother in college who dreamed of becoming a big advertising executive, and he had it all planned out on how he was going to do it. He showed me a blueprint he had designed that could be used to sell anything. Basically, it was a template built around sex and sexy images where you filled in a blank spot with the product or service. I told him it was too transparent, people would see right through it and that it was all about sex. “Dude, that is the point. Sin is in baby, and do you know how you spell sin? F-U-N. It doesn’t matter what you’re selling, just make it sexy and fun.”
Clearly, he was onto something as that is one of the most frequently used models in entertainment and advertising. And, don’t think for a moment that Money TV is anything more than entertainment. It may look and sound like advice, but it isn’t.
Several years back I wrote for one of the websites owned by one of the big names in infotainment for a brief period. Ostensibly it was because they wanted my perspective on dividend-centric value investing, which was a voice that typically wasn’t heard by the infotainment audience. Shortly after I started, coincidentally I’m sure, my research started showing up on the principal’s nightly cable show. Now, what was really interesting is this fellow had never given any indication that he used value or dividends in his analysis, and suddenly, he starts waxing on about using dividend yields to identify entry and exit points on a stock. Not just any stocks mind you, but stocks I had written about for the website.
I never made a big deal about it with the producer, I just simply called it a day and moved on. Shortly after I stopped contributing, coincidentally again I’m sure, the host stopped presenting dividend-centric, value investing ideas.
My point with this little rant, and I do have one, is that any advice you get for free, even from sources presumed to be knowledgeable, is worth exactly what you paid for it. You’re not going to get rich watching Money TV. Look, if it were that easy everyone would just quit their day job, get comfy on the couch, grab the remote and a pad of paper, turn on the tube and jot down their trades for the next day.
Investing is a business and should be treated as such. That means putting in the time and doing your homework. There are no short cuts in the stock market.That so many market participants do act on the “information” they get from the financial media and cable news, however, can be used to the enlightened investors advantage. More specifically, every time the market goes into a tizzy over something that has nothing to do fundamentally with a high-quality company with superior internal economic metrics, and they drive the price down to Undervalue levels, you should be ready to pounce and scoop up some shares.
My thought is the hyperventilating de jour over the current administration could very well provide one of those buying opportunities we wait so patiently for. Look, this isn’t a political statement, I just have seen this movie before and I have a pretty good idea how it will end up.
There’s a lot of stuff we need to get done in this country: Healthcare, tax reform, deregulation and infrastructure build out. If we can get down to taking care of that business there is a lot of money to be made in the stock market.
Wall Street knows and understands this better than anybody. They’ll put up with some nonsense for a little while then they’ll lower the boom. Our job is to identify and acquire good values as they become available to profit when that boom takes place. That is all, now soldier on.
Performance data for the Investment Quality Trends model portfolio is compiled and maintained by the Hulbert Financial Digest, an independent third party.
The benchmark index for the Investment Quality Trends model portfolio is the Dow Jones Wilshire 5000 Total Market Index. Since 1986 the Investment Quality Trends model portfolio has demonstrated, on average, approximately 15% less risk than the Dow Jones Wilshire 5000 Total Market Index.
The Lucky 13 appears in the January issue of the newsletter and shows 13 stocks we think can outperform the market.
In short, The Lucky 13 has been extremely successful and not surprisingly, quite popular. While not every stock in each Lucky 13 portfolio has been a winner, there have been sufficient winners in each group to produce 15 years of positive total returns, twelve of which have exceeded 10%.
Whether you are looking to build a portfolio from scratch, are partially invested and looking to add new positions, or are fully invested and merely in need of some affirmation and hand holding, The Timely Ten presents our top ten recommendations as of each issue.
Short of utilizing the personal investment management services of our sister company, IQ Trends Private Client Asset Management, this is as close to real time as you can get.
In each issue, with the exception of the first of the quarter, IQ Trends publishes four of our proprietary charts. These charts range from new entries into the Service, new entries into the Undervalued category or modified Profiles of Dividend Yield, companies in the Timely Ten, or companies that exhibit characteristics that show promise.
As a value added benefit to our subscribers, IQ Trends now allows access our archive of proprietary charts. No longer will subscribers have to wait for their favorite company to fall into one of the above mentioned categories for its chart to be published.