By 2 Cents on August 15th, 2011 | Category: Investing |  Continuity gives us roots; change gives us branches, letting us stretch and grow and reach new heights.
~Pauline R. Kezer
My computer will be packed and we will probably be en route for stage one of the move by the time you read this. It’s unfortunate that this geographical move is coinciding with more historical economic and market moves. I wish I could follow it all a little more closely. Alas, life happens.
The good news is that if you’ve been reading BJ for the past year or so, you weren’t lulled into complacency by the 2009-2011 rally. To borrow a metaphor from David Rosenberg, you knew that the rally was a house of straw rather than bricks. Hopefully, you managed risk accordingly.
Besides the market, I’ve been short on time, sleep, and as a result, brain power. So I’ll use today’s [...]
Read on and enjoy … On the Move
By 2 Cents on August 8th, 2011 | Category: Investing |  Poetry is nearer to vital truth than history.
~Plato
In our recent discussions about the Couch Potato style of investing, I mentioned that this strategy relies on historical market returns. I pointed out that including a component that reflects valuations might improve the strategy. This is basically the Valuation Informed Indexing approach about which Rob Bennett often writes.
I mentioned in my last post that I like to look at historical data regarding market performance and valuations, but that I didn’t want to rely on it completely. I’ll explain my thinking here and you guys can let me know what you think.
Past Performance Is Not Indicative of Future Results
“History is a vast early warning system.” ~Norman Cousins
One of the [...]
Read on and enjoy … History Only Rhymes
By 2 Cents on August 7th, 2011 | Category: Investing |  It was widely rumoured around trading desks on Friday that S&P would downgrade the U.S. credit rating, stripping its coveted AAA status. Many dismissed the rumour. After the markets closed, it happened. Now what?
I have no idea what will happen when markets open tomorrow morning. It seems like there’s a pretty good chance of another major sell-off, although the market seems a lot more concerned about the situation in Italy than the U.S. debt downgrade. So far, Middle Eastern markets have opened down sharply, but they weren’t open on Friday, so they could just be playing catch-up.
On the optimistic side, it’s possible that the ECB will come up with something that (at least temporarily) calms the market’s concerns about the European debt crisis. According to some, there’s even a chance that markets could enjoy a kind of “sell the news” rally in the wake of the [...]
Read on and enjoy … What Happens Monday?
By 2 Cents on August 4th, 2011 | Category: Investing |  I know what I have given you. I do not know what you have received.
~Antonio Porchia, Voces, 1943, translated from Spanish by W.S. Merwin
Well, it took about two weeks, but the Couch Potato cabal piled on all at once in response to my post on Why This Is No Market for Couch Potatoes. Unfortunately, they did so on the day I was out of town with my son for his follow-up surgery so I wasn’t (and to some extent still am not) in the best condition to comment. I’m still busy with post-op pain management and preparing to move, so I’ll have to make this quick, and therefore less thorough than I’d like.
While some fine points were made, I was fascinated by the number of people who commented and attributed a point of view to me that I didn’t think I had put [...]
Read on and enjoy … Couch Potato Rebuttals
By 2 Cents on August 1st, 2011 | Category: 20 Cents |  Here come the Dog Days! It’s time to savour every last moment of summer. Unfortunately, our Dog Days will begin with another surgery for my son. Things aren’t quite going according to plan, so he needs a day surgery to (hopefully) fix that. At the same time, our move out of town is less than two weeks away. As a result, posts in August will be exceptionally sporadic as will email and comment responses. Thanks for your patience!
I’ve got a really nice mix of articles for you here from July. Enjoy!
1. Tony Schwartz presents Ten Principles to Live by in Fiercely Complex Times. There’s some great food for thought here.
2. Bret from Hope to Prosper reminds us that He Who Dies With the Most Toys Is Dead. There are some fine tips here on saving for the future [...]
Read on and enjoy … 20 Cents from July 2011
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