Ron’s Gone

Ron Insana signed off for good today, sort of. He will no longer be a regular anchor on the network. I read in a couple of places that he plans to appear here and there and will retain some sort of title as an analyst. Some readers have commented in the past that they think highly of Ron and that he is smart. It’s tough to know how much of the things he passed on to viewers he actually knew or was just that, passing on but, to the extent that he had editorial influence, he did go out of his way to educate viewers more so than the other anchors and for that I commend him. In transitioning over to Maria for Closing Bell she gave him about the coldest “thanks, Ron” you can imagine,...

Ono Its Apollo!

I did not really understand Coke’s Olympic commercials with the guys in the living room. I have never understood the very high volatility of the education stocks, like Apollo Group (APOL). It seems like once or twice a year they all take a turn leading the group lower with day-ruining drops that take down the entire group. A part of the problem, I think, is what they are selling, which is not necessarily tangible. I have never owned one of these stocks because of the volatility. The idea of what they do is very appealing. A theory I subscribe to is the need for the American workforce to become more self sufficient and entrepreneurial in order to succeed. The type of education offered at these for-profit schools play right into this, but somewhere there is a disconnect. Speaking of disconnect, Google!! I have written several times since my too early sale that I no longer have a feel for what the stock can do so I am staying away. Today’s news and subsequent drop doesn’t really...

IPOs???

I have a new content service called The Fly On The Wall and this morning they are passing on info about Fidelity signing an agreement with JP Morgan to offer IPOs to Fido’s retail clients. Does this mean JP Morgan does not have enough demand? The last time discount brokers signed to get deals, the results weren’t so hot....

Not So Fast, My Friend

The Wall Street Journal had an article on Monday that made the case for lower interest rates due to baby boomers transitioning their portfolios from stocks to bond as they get older. The first time I ever heard about the boomer’s impact on capital markets was in 1989 when I was at Lehman Brother’s. There are many reasons to be skeptical about the conclusion of lower rates despite the visibility for more demand. First is that many boomers will be influenced, one way or another, by the notion that bonds do not protect against inflation. Inflation has been trending lower for 20 years. It makes sense to think that inflation cold generally heat up some for some multi year period. The average life expectancy in the US, I believe, is the mid to late 70’s. However the number goes up dramatically once you make it to 65 (anyone that has the actual data, please jump in). Then factor in medical breakthroughs that will prolong life, what if Michael Milken is correct and cancer ceases to be a cause of death by 2015? What would that do to the number? Portfolios will need to create growth for 30 years. Bonds won’t do that job. Perhaps most importantly is that, in my opinion, this effect is the type of thing that the market prices in ahead of time in such a way that the impact comes far short of what is...

Foreign ETF Portfolio

A reader emailed in asking about an article on MarketWatch written by Bill Donoghue about a portfolio of foreign ETFs that he either manages or sells through his own website (this is how it appeared to me). The results have been good, he cited up 20% in the last six months. The article listed the holdings as follows; iShares S&P Latin America 40 (ILF), iShares MSCI Brazil (EWZ), iShares MSCI Mexico (EWW), iShares MSCI South Korea (EWY), iShares MSCI Canada, iShares MSCI South Africa (EZA), iShares S&P/Topix 150 (ITF), iShares MSCI Japan, Shares MSCI Emerging Markets (EEM), and Vanguard Pacific (VPL). Those ETFs made up 80% of the portfolio and the other 20% was in an unnamed fixed income fund, perhaps more than one, the article did not specify. This is one of several portfolios offered by Mr. Donoghue. The article did not offer an opinion as to how muchof an investor’s assets should be invested in foreign, be it this specific portfolio or something else. The reader wanted to know my thoughts on the portfolio. First thing, as I always say in these types of posts, all portfolios like this will have flaws including anything I might assemble along these lines. This chart isolates the first two quirks that I noticed. The portfolio owns both EWJ and ITF. You almost can’t see EWJ on the chart because the returns have been as close to identical as I think is possible. I’m not sure what the value is in buying both. I think you’re just paying an extra commission. The other two ETFs in the chart both cover Latin...