The Big Picture For The Week Of December 30, 2007

Sharpe Ratio Article

13 Comments

  1. Coincidently, Mebane Faber has a post up today at worldbeta.blogspot.com detailing asset allocation for the Yale and Harvard endowment funds. He also includes some commentary saying that other endowment managers who try to emulate the Yale model don’t do nearly as well. He includes sample etf’s for each asset class for anyone who wants to play along at home.

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  2. http://tinyurl.com/3apupx

    Argument that the yield curve is now becoming normal. Roger, what do you think?

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  3. The positive slope seems to exist between 3-10 years and the spread between the two of 100 basis points (give or take) doesn’t seem like a great environment for banks to thrive. For now libor, fed fund and discount rates are all much higher which I think still impedes access which is what an inverted curve is all about.

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  4. For your “How lazy can you get?” portfolio one might consider this new offering from Northern Trust:

    http://tinyurl.com/38atgr

    Roger.
    Do you have any comments about the Dog’s of the Dow idea for this coming year? Maybe LCV investing for ’08 may be a winning theme.

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  5. JackS,

    buying the entire world with one ETF is probably a compelling idea for people who do not need to attempt to add value–this pertains mostly to people that are way ahead of where they need to be savings-wise.

    There are some diehard indexers that might want this fund but it may not be the best thing for them–not that it would hurt them , I’m just saying no the best thing.

    LVC, assuming large cap value?

    Late in the cycle has positive implications for large cap however an abnormal yield curve has negative implications for value–particularly financials as I have written about a lot.

    Dogs of the Dow, I believe, has worked far more often than not but it relies too much, for my tastes, on something that is not necessarily fundamental.

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  6. Roger, the traditional advice usually includes overweighting healthcare stocks during a market downturn. While they don’t fit the uncorrelated “other” category, I don’t recall you saying too much about them. Would you be wary of the segment in an election year that seems to favor the democrats?

    Thanks for your thoughts.

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  7. Not along a long-short fund was somewhat slammed for being too expensive, but is it if they earn their fee? And its ytd return is far ahead of s&P. Is is supposed to be tied more closely to this index as criticized?
    FUND OVERVIEW
    Category:
    Fund Family: Nakoma Capital Management LLC
    Net Assets: 68.11M
    Year-to-Date Return: 14.59%

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  8. Healthcare?

    The book says overweight in a recession/bear/slowdown and that makes intuitive sense to me.

    However I am not a fan of much in the way of big US pharma. clients own JNJ and a big foreign name. PFE seems permanently broken (this Motley Fool Article might be the first time I said that publicly)and MRK seems more like a special situation that may not provide real healthcare exposure.

    The other names I own in the space (a biotech, a device, a generic and a testing) are obvously in a diff part of the space and have generally done well (the testing company not so much).

    Looking ahead I might be more inclined to end up over weight as a function of cutting back elsewhere.

    Re expensive funds, I don;t think expense is the number one thing. It matters but not number 1. Nakoma (which I own for a few people) got panned this morning on one of the Fox Shows who does not know much about the fund. I interviewed them for TSCM and came away favorably disposed.

    Some expensive funds have feast and famine. this is not bad per se but I think it is easier for people create feast and famine than the slow and steady that Nakoma creates.

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  9. I just saw a post at Bill Cara on health:)

    Health Care Delivery…i bought this sector a couple of weeks ago/IHF as a 9percent position and expect to hold it for a while. Personally have a pension with health benefits…knock on wood..but my wife has private and it won’t be long until I place her on my insurance plan to get so called group rate, now about what finger lakes (cira 450) is paying for I suppose more than one person.

    As us baby boomers age our bucks are going to stop going into second homes and portfolios etc; money will flow like a dammed river into health. An overnight hospitalization with routine testing runs over 20K; personal experience. The question is who/what will be the winners among the usual list: pharmacies, pharma, hospitals, insurers, medical devices? Currently, scams for reversing the aging process are cleaning up in the retirement states of florida and arizona…so I hear. Then there’s the future role of government.

    Posted by: jasper [TypeKey Profile Page] at December 29, 2007 5:52 PM

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  10. How did Nakoma, an obscure fund, make it to Fox?

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  11. Roger,
    First I wish to thank you for being so accessible to answer and respond to a range of questions and comments; some more basic than others.

    Now to a basic question. What does “total return” mean when used in the context of a fund name? The context example I have in mind is:
    iPath DJ AIG Agriculture TR Sub-Idx ETN (JJA) Thanks for another year of blogging. Jasper

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  12. You click here here for the Investopedia definition.

    As none of the ETNs pay anything out I am not positive of the meaning other than perhaps to imply whatever the index does the ETN will mimic?

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  13. Yes, I should have said that I checked investopedia..i go there a lot.

    I’ll go onto read Sunday’s post…but any suggestions on the best way to search for a mutual fund that is on the same page as what you are talking about….trying to get a few percentage points appreciation with additional dividends and has good odds for not falling prey to a bear mkt? Would this be funds tagged Total…”? /jasper

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The Big Picture For The Week Of December 30, 2007

Sharpe Ratio Article

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