Iceland

I first wrote about Iceland as an investment destination back on March 31. I recently started the process to invest some money personally up there. It involves mailing a whole bunch of stuff up there and I am not sure it will happen on the first go around but I’ll keep you updated. Recently the folks over at Everbank created a CD that is tied to the Icelandic Krona. Everbank also has a free daily newsletter that I get call the Daily Pfennig that is usually a good read and I would encourage anyone to take a look. In today’s letter there was a lot of detail about Iceland that I thought I would pass on. The Icelandic Krona continues to be the 'hot currency investment' hereon the desk. We are receiving a number of calls from investors bothnew and old who are interested in this tiny economy and its potentialcurrency gains. But we are not the only ones who have noticed thisopportunity. Neil George, editor of popular Personal Finance newsletter haswritten several times on the benefits of investing in this country.Here is an excerpt from his daily newsletter 'By George':"ICY HOTFor years now, I've been pushing folks to invest in and travel to oneof my favorite islands in the North Atlantic. Now, thanks to somechanges and more participation in Iceland's currency, stock and bond markets,it's time for us to take a harder look and send some cash to the smallisland economy.This is no puffy travel piece on Iceland. This is about a market that'smade up of 286,275 people who have taken what the rock-strewn islandhas to offer and...

Investors Cannot Live by ETFs Alone

Investors Cannot Live by ETFs Alone I wrote the above article for TheStreet.com. Long time readers will know that I have not been a fan of 100% ETF portfolios but the article is the most complete article on my thoughts about...

Processing Through

It looks like the most recent economic data has been equity friendly. That gas prices have come down so much I think opens the door to some good retail sales for Christmas. To me, this creates a tail wind for stocks. I have repeatedly laid out a bearish case for 2006. And while I do not plan to change that outlook, there is no reason that equities can’t go up. I will be in there until my exit strategy triggers again because markets do not have to be logical. It is for this reason that I do not try to out guess or out maneuver big shifts in the market. They may never come. I think too many people, pros and do-it-yourselfers, get too caught up in trying to time these things based on gut. Realistically I think you might be able to be right about this sort of thing once or twice. The rest of the time not. I think it is just simpler to let the market drive the bus. No one needs to be out at the very top nor in at the very...

Cripes

I watch a lot of stock market television. Aside from catching news I like to hear process from other people. Unfortunately some of the people conducting the interviews don’t know what to ask. Yesterday right before the close Maria interviewed Alex Motola who manages the Thornburg Core Growth Fund (THCGX). The fund is a bottom up growth fund that is up almost 20% on the year. The fund only owns 40 stocks so clearly the guy is good at picking stocks. As a note just because I am top down does not mean I can not learn from a bottom up guy and at some point in the top down process, stocks do have to be chosen. Motola mentioned that he likes Microsoft now. He cited a couple of reasons why and while they make sense who knows whether he will be right but that is not the point. The point to me is that despite the market already knowing about the new OS and so on he still likes it. Process not product. OK, good stuff. After mentioning Microsoft, Maria’s first question was about the stock having done nothing in 5 years. First the comment plays into a mistake too many people make. Often, investors care more where a stock has been than where it is going. If a stock has doubled, you buy and it then triples, who cares that it doubled before you bought it? As Maria was saying it hasn’t done anything they put up a chart that showed a nice lift over the last month or so. He said he bought it recently which...

Inverted Curve

I have been having a fun back and forth discussion with Howard Simons on the RealMoney columnist conversation section about the implication of an inverted yield curve. Howard knows much more than I do and has more experience. I do not believe I can out-debate him on anything related to capital markets but that does not mean he is right either. I’m not sure that it is ok to just paste content from RM in this blog but I can tell you that he believes that since more financing is done with floating rate debt, the old notion of un-profitable lending is not the same as it once was. One thing that I think he mis-understood from my comments (which I will paste below) was about flat yield curves. The curve was flat during most of the bubble inflation. Flat can mean slowing is coming but my concern on this blog and in my RealMoney posts was just about inversion. 11/28/2005 10:38 AM EST I’ve been concerned about inversion for a while and I have been writing about on my blog as well. For what it’s worth I am not concerned in and of itself of an inversion of the two year and the three year. Inverted curves making bank lending un-profitable. Most banks don’t borrow for two years to lend at three. I see one of two outcomes given that the Fed looks like it is going to at least 4.5%. Either the ten year will yield less than t-bills (inversion) or the curve will normalize and the yield of the ten year will be much higher than...