Gary E. Miller

Does anyone remember Elaine Garzarelli? Henry Kaufman? Martin Zwieg? These were widely quoted market gurus of the '70's and '80's who got one or two predictions right, then became media darlings. None were successful actually handling real money for real people. Consistency is an under appreciated virtue in my business. Trusted Financial Advisors values this virtue.

"Whitney's Fund Said to Drop 11% as Office Put on Market"
By Max Abelson Dec 21, 2014 6:36 PM PT
Dec. 22 (Bloomberg) –- Meredith Whitney, who started a hedge fund after becoming one of Wall Street’s most famous analysts, is facing tough times. Bloomberg’s Max Abelson reports on “In The Loop.” (Source: Bloomberg)
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This energy transportation company was the financial headline du jour on Monday August 11. The company is really a “family” of companies all under the oversight of Richard Kinder who once was CFO at Enron, which became a House of Fraud after his departure. Over the past 18 years he has overseen the growth of his company from a handful of natural gas pipelines to what is now the third largest energy company in the world. We have invested our clients capital in one or more of the Kinder Morgan entities since early 2004, enjoying average annual returns in the double digits with steadily rising dividends all along the way.

Bill Gross, PIMCO’s “Bond King” and manager of a mutual fund widely held in our client portfolios was interviewed just before Thanksgiving 2011 on Bloomberg TV. Among his comments he revealed how he personally is positioned with his investments. This part on how Gross is invested was interesting:

“Sell in May and Go Away” is the common wisdom of equity traders, and after 36 Summers in this industry, I agree that for traders, this is useful advice. My desire is to emulate the success of value investors who are nearly all long term position holders, so selling in May, just because the Summer is often challenging for stock valuations, does not carry much weight with me.  This year was a little different. Oil prices have been rocketing, the dollar collapsing and the political climate in Washington is unlikely to tolerate further monetary stimulus by our Federal Reserve bank.  So beginning about a month ago, I became less tolerant of client equity holdings that failed to hold important technical support (yes, I use charts too).  We reduced a long time holding of a forest products company and a major player in software, thus raising client cash from a level of virtually zero to about 6% of portfolio values.

Year End Roundup

The quarter ending December 31, 2010 was a blowout for stocks and commodities, so it may be difficult to recall that stocks suffered a mid-year bear market - a loss of 16% between April and August. This was spawned by a few factors, fears about a financial collapse of European banks and even nations the most prominent. Sentiment was not helped by the Administration’s coordinated attacks on a prominent Wall Street bank, part of a transparent effort to garner support for sweeping financial regulatory reform struggling in Congress. Then there were the incessant calls for a “double dip” recession from perennially bearish economists, who it seems were dead wrong. Your performance since inception has exceeded that of most asset classes, especially stock, which suffered two mammoth bear markets over the past decade: a decline of about 45% during the Tech Wreck a (2000 to 2002) plus another plunge over 50% during the Banking Crisis of 2007 to 2009.

Here is an interview that does a good job of expressing my thoughts regarding the current state of investment opportunities. In a nutshell it reminds us to take the daily financial headline, both bearish and bullish in stride.