Seeking Alpha Articles |
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| Posted on July 02, 2008 |
| The market and the economy have given investors much to think about since my last writing. With good reason, many have concerns about both the US and global economic picture. True value and bargains never appear so when presented, but in hindsight seem blatant. Bubbles in asset prices also tend to obfuscate themselves at tops.
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| Posted on Jan 6th, 2008 |
| The first day of trading for 2008 was the worst “opener” since 1983. Despite this, I am quite optimistic for earnings, the economy and stock prices. In the first half of 2007 there was scarcely a mention of sub-prime mortgages, CDO’s, SIVs and the TED spread. I suspect when the markets close on 2008, movements will have been dominated by news decidedly different from the aforementioned.
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| Posted on Oct 3rd, 2007 |
| The falsely mnemonic tone of market behavior of the last few years has deluded multitudes of market participants to plod along blissfully unaware the volatility bugaboo had simply taken an extended sabbatical. With a not insignificant amount of ferocity, volatility has returned to test our resolve.
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| Posted on Aug 9th, 2007 |
| Equity markets experienced indiscriminate selling today while the last of a stellar quarter’s earnings reports trickled in. Who would have thought at the beginning of this round of profit announcements numbers this good would coincide with such a drubbing? The consensus view was for earnings acceleration just north of 4% over last year but companies have delivered growth in excess of ten percent.
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| Posted on Aug 6th, 2007 |
| U.S. and world equity markets experienced indiscriminate selling Friday, while investment grade, high quality debt markets experienced strong performance. Friday's sell off comes amid an extraordinarily strong earnings season. Clearly, market participants are fixated on sub prime lending concerns.
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| Posted on Jul 11th, 2007 |
| This bond sell off did not come packaged as bond sell offs normally do, coinciding with a significant economic event or data metric. To some degree, this move complements two prominent opinion leaders, Goldman Sachs (GS) and Merrill Lynch (MER).
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| Posted on May 30th, 2007 |
| It’s no secret that a good portion of my firm’s benchmark beating track record of the last few years has been influenced by our decision to own REIT ETF’s. The REIT exposure of Efficient Market Advisors accounts has been primarily achieved through a position in I-Shares Cohen & Steers Realty Majors Index Fund (ICF). In the last several quarters I have grudgingly cut the ICF position in the name of risk management.
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| Posted on Mar 18th, 2007 |
| Shortly we will know the legacy of this Federal Reserve Board and its Chairman Ben Bernanke. If nothing else this Fed has been consistent in its communication to markets. Without a doubt the Central Bank has given us guidance that it is committed to “fighting inflation” which, rationally recomposed, means they are committed to a “sound currency”. Sound currency is undeniably a necessary component for strong equity markets.
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| Posted on Feb 28th, 2007 |
| Weather and equity markets have a lot in common. Predicting them with consistent accuracy is extraordinarily difficult and “fat tail” performance patterns are regularly reversed in a sudden and ferocious manner.
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| Posted on Dec 4th, 2006 |
| Recent market action has led many to incorrectly assert that the bond and stock markets are in disagreement about the future of the economy. Considering the action of the dollar, they muse, makes it two to one in favor of a recession. I believe all three markets are acting rationally and are providing us with a nice look into 2007.
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| Posted on Oct 31st, 2006 |
| Despite an unrelenting multi-year unveiling of contemptible fund company behavior, ETF manufacturers are not thinking twice about finding new ways to burden unsuspecting investors. Last week we caught a glimpse of the coming scandal involving 27 fund companies stealing hundreds of millions of dollars from shareholders by secretly taking kickbacks from service providers. Now, a few manufacturers are beginning to quietly slip 12b-1 Mickey’s into our previously untainted ETFs.
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| Posted on Sept 18th, 2006 |
| Often confusion exists about the 15% dividend rule for qualified dividends. The important adjective here is “qualified”. There is some misunderstanding floating about relating to the qualified nature of dividends passed through to ETF shareholders. Further, not all ETFs are created equal when it comes to low tax rate dividend distributions.
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| Posted on Sept 13th, 2006 |
| Stocks look to go higher, much higher. When you ask? Technically speaking (pun intended) the answer is now. Back on May 19th I penned “How to Identify a Market Top” for this space and on November 30th of 2005 I stuck my neck out with “Dow 15,000?”. I was pretty close to the top on energy and gold and it appears time will prove me right on stock prices.
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| Posted on Aug 23rd, 2006 |
| As the ETF industry expands its reach, marketing the product creations can stretch in conjunction. While this observation is not profound it is well understood within the fraternity of mutual fund industry professionals. Need and demand are two very different things when it comes to financial products in general and Exchange Traded Funds in particular.
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| Posted on Jul 26th, 2006 |
Waiting for my firm to make tactical changes to its investment allocations is a lot like waiting for Sus Scrofa to sprout wings and fly. Actually, I tend to make slight tactical model changes three or for times per year, while airborne swine have yet to be spotted during this market cycle.
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| July 18, 2006 |
As one who embraces the Theory of Market Efficiency, I believe the majority of value created within portfolio management comes from the asset allocation decision. When constructing asset allocation models one must resist the temptation of vanity and assume the worst about their own talents. Gasp! I may be wrong.
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| May 30, 2006 |
I finally had time to review the Proxy related, among other things, to the proposed acquisition of PowerShares Capital Management LLC by AMVESCAP PLC and AIM Management Group. I have noticed some interesting tidbits worth pointing out. Readers should review the proxy carefully and make their own conclusions before casting a vote.
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| May, 2006 |
Last November I was fortunate enough to have two articles published on the Seeking Alpha Network in the ETF Investor Section. Both generated a nice bit of response from readers and fellow contributors.
In the first article “Earnings vs. Energy Prices” I pointed to the fact that CPI increases did not correlate with stock price decreases. As a refresher, I published the following table in that article:
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| Wednesday, January 25th, 2006 |
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Last year the $1.3 billion Rydex S&P 500 Equal Weight Fund (RSP) gained 6.78%. The predominant large cap ETF of choice, State Street Global Advisors’ S&P Depositary Receipts (SPY), returned 4.78%, underperforming its equal-weighted S&P 500 cousin. This occurred despite SPY’s significant cost advantage (SPY’s expense ratio is .11% vs. the hefty .4% for RSP). Is this simply normal statistical variation or is there something more?
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| Tuesday, January 10th, 2006 |
Today marks the one month anniversary of trading for the Powershares ValueLine 100 Index Fund (PIV). It’s rare that I am enticed by the siren wale of the fund industry’s product machination machine but even the strictest dieters fall to temptation once in a while. (I bought a few shares recently.) I see several issues worth exploring before deciding to aggressively purchase this new ETF.
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| Wednesday, November 30th, 2005 |
With each passing day I become more convinced of the coming rally in stock prices. I believe the upside potential in the S&P 500 to be close to 35% over the next thirteen months provided interest rates remain at current levels. Returns should be only slightly lower if interest rates rise modestly. I look to the Fed Model to support my assertion:
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| Monday, November 7th, 2005 |
| No one can deny that consumer prices have risen in the US economy, well energy prices that is. The question currently raging in the minds of portfolio managers and pundits remains. Will the price increases in energy become permanent and will the increases in energy prices be pushed through to the prices of other consumer good?
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| Tuesday, October 25th, 2005 |
Herb Morgan (CEO of Efficient Market Advisors, LLC) submits: Wall Street has its own vernacular to be sure. Occasionally even, some of it makes sense. More often than not the jargon we use has absolutely no practical meaning. One old saying that gets used over and over in an attempt to sell active money management is the phrase, “It’s a Stock Picker’s Market.”
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| Friday, September 16th, 2005 |
Some might consider the notion of adding Alpha (performance relative to an index) in ETF portfolios an oxymoron along the lines of “jumbo shrimp” or “healthy tan”, writes Herb Morgan, President and Chief Investment Officer of Efficient Market Advisors, LLC. After all, ETFs are constructed to mirror indexes, and indexes are the vehicle of choice for academic purists and penny pinching cheapskates. (I believe I fall into both categories.) Yet today there is no shortage of money managers trying to use index products for the generation of Alpha.
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| Monday, September 12th, 2005 |
Many of those desirous of tax exempt income are current owners of leveraged closed-end municipal bond funds, writes Herb Morgan, President and Chief Investment Officer of Efficient Market Advisors, LLC. These funds come fully equipped with all the risks of leverage. Unfortunately, many of the owners of these vehicles are completely unaware of the hazard that may await them.
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| Friday, September 2nd, 2005 |
I must admit that I recently became excited about the waxing competition in the ETF manufacturing business, writes Herb Morgan, President and Chief Investment Officer of Efficient Market Advisors, LLC. Barclays still has the lion’s share of the market for sure, but Vanguard has recently caught my eye. After all, Vanguard has a reputation for doing things right: low fees, honesty, and generally serving as a watchdog in a historically slick industry. But from what I can tell, it looks like the good guys are trying to pull one over on us this time.
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