Public

I recommend this article to anyone thinking of buying individual property as an investment. We've used real estate investment trusts in our client portfolios for many years with good results. The nice thing about REITS is they allow the investor to exit rapidly rather than becoming entangled in the often lengthy process of negotiations with a limited number of buyers a problem that characterizes ownership of individual properties. Even better, the investor avoids the hassle of property management.

"Why Real Estate Should Be in Your Portfolio" Barron's | Jan Willem Vis Investors who have been inclined to dismiss listed real estate as an attractive asset class since the financial crisis should perhaps reconsider, as they could be missing out on the important roles that listed real estate can play in multi-asset portfolios. Not only can it operate as a proxy for direct real estate while generating diversified returns - with a stronger income component arising from high dividends - it can also provide some protection against rising interest rates, which may come as a surprise to some. Evidence shows that, over the long term, investment in listed real estate offers an exposure to direct real estate (including real estate physical property investments and unlisted funds) while addressing the well-known illiquidity problems associated with owning a portfolio of individual buildings. Read More

While I’ve not read the Dept of Labor proposal, on the face it appears to target conflicts of interest that troubled me until deciding to become a “fee-for-service” financial planner at the end of 2000. My company, Trusted Financial Advisors has never been financed through commissions, hidden 12b1 fees or the like. This is still […]

Now it’s clear, the Affordable Care Act was the ultimate “progressive” tax increase. Back in the ’80’s taxpayers rose up and forced Congress to index tax brackets so that inflation did not artificially force middle class earners to pay taxes at the same rate as the wealthy. The Obamacare taxes are not indexed, meaning over […]

Our clients’ managed accounts were up a fraction of a percent in the quarter just concluded, in line with the quiet performance of both stock and bond indexes.  While we are still compiling the figures, it appears a composite of size weighted client portfolios averaged between 9% and 10% per year over the past five years.

The Markets
Following the explosive upward action in equities that capped off a healthy 2014 for long positioned investors, the first quarter was burdened by three albatrosses:   A large portion of the country, particularly the Northeast was socked by repeated snowstorms and extreme winter weather that kept shoppers at home and construction activity frozen. On the West Coast, the Longshoreman's union battled management in a slowdown/strike that cost retailers at least $7BB in lost sales and countless $ billions for farmers whose exports were delayed or cancelled.

Utilities have always represented a significant component of our Balanced-Value portfolios. We try to find opportunities in an evolving industry.

Utilities Push Into Fuel Stations for Electric Cars
The New York Times | By Diane Cardwell
Since hitting the mass market about five years ago, electric vehicles have failed to take off, largely, experts say, because a robust network of public charging stations has not been built. Car companies, retail chains and members of an infant charger industry have announced... Read More

Amazing- yet another administration will dodge this minefield and pass it on to …us.

Obama’s What-Me-Worry Social Security Plan
Barron's | By Jim McTague
Leave the country’s biggest fiscal mess for the next guy. That is President Barack Obama’s strategy for addressing the disintegrating Social Security Trust Fund. The massive monument to Democratic Party progressivism, which comprises the $2.7 trillion Old-Age and Survivors Insurance program and the $70 billion Disability Insurance program, is on course to begin spilling red ink in 2019. Like prosperity, that’s just around the corner—beginning in the third year of our next president’s first term. The disability program will go red... Read More

Great article that reminds us how indolent and unresponsive are many corporate boardrooms. Just this AM, American Tower's (AMT) board disappointed when they were unable to provide deep color on a large purchase of cell phone towers from Verizon at what appear to be the lowest margins of any of this REIT's recent acquisitions. Perhaps they need to hear from activist investors as did Tim Cook shortly before announcing a share split, buy backs and dividend increases for Apple (AAPL) about a year ago (and look what that did for the stock!).

Capitalism’s unlikely heroes
Economist
AS INVENTIONS go, the public company is one of capitalism’s greatest. Initial public offerings promote innovation, by providing an exit route for entrepreneurs; being listed makes a firm open to scrutiny; and ordinary people have a chance to invest in capitalism’s wealth-creating machines. But the past 15 years have cast a shadow over the public company. There was not much sign of scrutiny or wealth creation in fiascos like Enron and Lehman Brothers. Governance has been weakened by the rise of passive index funds... Read More

I try to learn from the best, and Klarman whose 1992 book "Margin of Safety" now sells for $2,000 on Amazon is among the best. His simple rules are classic value thinking. He is willing to hold cash when the good companies are no longer available at bargain prices. We may be in such a time.

Seth Klarman: What I’ve learned from Warren Buffett
Financial Times | By Seth Klarman
As Warren Buffett was a student of Benjamin Graham, today we are all students of Warren Buffett. He has become wealthy and famous from his investing. He is of great interest, however, not because of these things but in spite of them. He is, first and foremost, a teacher, a deep thinker who shares in his writings and speeches the depth, breadth, clarity, and evolution of his ideas. Read More

"when you see tax increases, think pensions.”

The Pension Sink Is Gulping Billions in Tax Raises Remember that ‘temporary’ tax hike for California schools? Most is now going to public worker retirements.
The Wall Street Journal | By Steve Malanga
California Gov. Jerry Brown sold a $6 billion tax increase to voters in 2012 by promising that nearly half of the money would go to bolster public schools. Critics argued that much of the new revenue would wind up in California’s severely underfunded teacher pension system. They were right. Read More (subscription required)

GREAT analysis of the current supply driven oil glut. Very much along the lines of a presentation I gave for our clients in December. However low prices are likely to remain for longer than some of the analysts quoted herein expect. We appear to be in a "secular" bear market for energy that could last 15 to 20 years. Good for kickstarting the world economy!

Back to the Future? Oil Replays 1980s Bust
The Wall Street Journal | By Russell Gold
A surge of oil from outside of the Middle East flooded global energy markets. The world-wide thirst for crude didn’t keep up. The Organization of the Petroleum Exporting Countries stood by and watched as oil prices fell and then fell more. Read More (subscription required)