December 2006

It’s obvious that the falling dollar has had a positive impact on International equities, but how much?? One way to compare the two is to see how much a Barclay’s International ETF has performed vs. the index upon which it’s based (trading in the local currency).? The Washington Post just ran an article analyzing this, and it found that, for example, “Year to date through Nov. 28, the EAFE index was up 17.4 percent in dollar terms but had gained only 7.9 percent in local currencies.”? When you’re thinking of rebalancing your portfolio, think about whether you want to continue making this dual bet:? that International equities will continue to flourish and that the dollar will continue to fall.? These two factors will greatly influence whether the excellent returns of 2006 will happen again in 2007.

I heard a piece on Market Place (with both audio and transcript) over the weekend about investing in Cuba via the Herzfeld fund. It’s a closed end fund, trading at a much higher premium to NAV than I’m comfortable with (nearly 40%), but it does have a tantalizing investment strategy, and the fund is up 50% so far this year. Herzfeld focuses on businesses in the US that are poised to profit when US/Cuba relations are restored. Here’s a great quote from the piece that highlights this principle: (more…)

As 2006 is rapidly coming to a close, it’s worth a reminder to check on all your year-end planning… Here’s a bullet list of things to think about…

  • Are there any losses you have in taxable accounts that you’d want to realize for tax loss selling?
  • Have you contributed your max to retirement accounts to minimize taxable income?
  • Rebalance your portfolio if you do it once a year.
  • Pray that you don’t qualify for AMT.
  • Watch for the earnings distribution estimates from your mutual funds held in taxable accounts. (more…)

For the latest random news articles on hedge funds, Pfizer, REITs, and more… (more…)

Titled “Out-of-the-box Thoughts on the Yield Curve”, Steve Saville throws out some very good commentary on the current yield curve inversion. I have to admit that his commentary has defined my own understanding of what yield curve inversion really means and what (if anything) it forecasts. (more…)

After a fairly depressing week of news showing relatively little impact on the equity markets, there seems to be a large amount of optimism still left in the current bull market trend (it’s safe to call this rally a bull market, right?).? A quick glance at the bond market seems to suggest that this week woke some up to the fact that things might be bad enough soon that the Fed might have to actually start cutting rates before too long:? VBMFX is a good example of how prices are sharply up upon this week’s news.? While I’m not a major fan of bonds when there’s several options for money market rates at over 5% and 5.15% right now, it is nice to know that the bond market is aware that this equity uptrend isn’t going to last.? I’m of the opinion that we’re not going to get to finish this bowl of porridge before it gets too cold.? But this is just a gut feeling right now, since the trend still seems to be up (note that 100 point after 2:00 recovery in the DOW on Friday).

The Wall Street Journal has compiled a list of the more than 120 companies that have come under scrutiny for past stock-option grants here.? The list is long, and worth reviewing to remind yourself how many executives put their own financial well being above the fiduciary responsibility of protecting the rights of their shareholders.

The problem is so widespread that it is even showing up in Dilbert

I just ran into an amusing interchange between CXO Advisors and the Boo-Yeah man himself…? read it here: Guru Grades ? Jim Cramer Comments on Our Evaluations of His Advice.

The result is not too surprising… Cramer shows off his lack of professionalism and his ability to rant and play a game of distraction…

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