Wealth Building Strategies

How Alex Green Beat the Market 16 Years Straight

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Posted by Frank Holmes - US Global Investors

on Tuesday, 22 August 2017 07:56

COMM-alex-green-oxford-club-investment-u-08182017For more than a decade and a half, my friend Alexander Green has been educating and entertaining investors as editor of numerous popular newsletters, many of which I’ve cited in my own writing.

For those of you subscribed to one or more of his services through the Oxford Club or Investment U, I’m sure you’ll agree that Alex is among the finest financial writers working today. His articles are brimming with intelligence, wisdom, humor and candor—all of which he brings to his public appearances at investment conferences.

Last week it was my pleasure to speak one-on-one with Alex, and together we touched on subjects ranging from our favorite books on investing to the secret lives of millionaires to business moats.

Below are highlights from the interview, but this is only the first of two parts. I’ll conclude it next week in a Frank Talk, which you can subscribe to here.


You didn’t go into politics or medicine or law. What triggered you to go into the investment world?

At the time, I was living in Orlando. I got a copy of the Orlando Sentinel, and on the front page of the business section was a headline that read: “The average stockbroker in the U.S. makes $187,000 a year.” This was in 1985. Thirty years later, that’s still a substantial amount of money. I remember thinking: “If the average stockbroker makes $187,000, what do the good ones make?”



Wealth Building Strategies

World Markets Update

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Posted by Jill Mislinski - Advisor Perspectives

on Tuesday, 15 August 2017 06:50

All eight indexes on our world watch list have posted gains for 2017 through August 14. The top performer thus far is Hong Kong's Hang Seng with a gain of 23.86%, followed closely by India's BSE SENSEX at 18.11%. In third is our own S&P 500 with 10.14%.

The Last Four Weeks

The tables below provide a concise overview of performance comparisons over the last four weeks for these eight major indexes. We've also included the average for each week so that we can evaluate the performance of a specific index relative to the overall mean and better understand weekly volatility. The colors for each index name help us visualize the comparative performance over time.


2017 YTD Performance

Here is an overlay of the eight illustrating their comparative performance thus far in 2017.

...view more charts and analysis HERE


Wealth Building Strategies

Storm Advisory—What You Need to Know Now

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Posted by Frank Holmes - US Global Investors

on Wednesday, 09 August 2017 06:52


In July, the Institute for Supply Management’s (ISM) Non-Manufacturing Index fell to an 11-month low of 53.9, 3.5 points below its June reading of 57.4. The index measures the non-manufacturing, services industries such as food services, education, real estate, health care and more.

U.S. ISM Non-Manufacturing PMI sinks to 11-month low in July
click to enlarge

Economists had expected a reading closer to 56.9, so it’s safe to call this a disappointment. Although the index is still above the key 50 threshold, where it’s held for 91 straight months now, the slowdown suggests that “the economy may have lost some momentum going into the third quarter,” as Capital Economics’ Andrew Hunter said in a note last week.

Following this report, it’s possible we’ll see the U.S. dollar rally before pulling back even further. Having hit a 15-month low last week, the dollar looks oversold and ready for a “retracement,” as CLSA’s Christopher Wood put it.



Wealth Building Strategies

The Black Hole

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Posted by William Koldus - Seeking Alpha

on Tuesday, 01 August 2017 06:14


- Apple, Alphabet, Microsoft, Facebook, and Amazon are now the five largest U.S. market capitalization equities.

- Collectively their performance in 2017, the past three years, and the past decade has been amazing.

- They have also absorbed a tremendous amount of capital, sucking it away from other opportunities, and their run may be ending.

"A 60:40 allocation to passive long-only equities and bonds has been a great proposition for the last 35 years … We are profoundly worried that this could be a risky allocation over the next 10." -- Sanford C. Bernstein & Company Analysts (January 2017)

"Bull markets are born on pessimism, grow on skepticism, mature on optimism, and die on euphoria" -- Sir John Templeton

Life and investing are long ballgames." -- Julian Robertson


For active, value-orientated investors, the current bull market in U.S. stocks, which began in March of 2009, has been one of the most difficult bull markets to navigate in history. Said another way, it has not been anything like a day at the beach.

Keeping up with the market, without owning the five biggest market capitalization stocks, which are all large-cap growth stocks and listed in order of size, Apple (AAPL), Alphabet (GOOGL), Microsoft (MSFT), Facebook (FB), and Amazon (AMZN), has been nearly impossible.

A strong performance by the largest stocks spurred investors, speculators, and fund managers to allocate to these equities in ever-greater quantities, creating a self-reinforcing circle of buying exacerbated by the continued inflows into passive index funds and ETF funds.

So what is an investor to do?

The answer is that it may finally be time to step outside the black hole that is consuming a disproportionate amount of investor's capital. Simply avoiding shares of AAPL, which I was bullish on previously, GOOGL, MSFT, FB, and AMZN could be one-key to investment outperformance over the next decade.


The largest companies have consumed investor capital at an ever-increasing pace, forcing more and more investment managers to become closet indexers, closing active investment strategies, and creating a bigger opportunity for the remaining active investors.

The Five Biggest Are the Primary Culprits

Apple, Alphabet, Microsoft, Facebook, and Amazon have had extraordinary performance in 2017. AAPL shares are up 30% year-to-date, GOOGL shares have gained 21%, MSFT shares are up 19% in 2017, FB shares lead the pack with a remarkable 50% year-to-date gain, and AMZN shares are up a strong 36% even after their minor stumble Friday.

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....continue reading HERE



Wealth Building Strategies

Inside the Mind of a Crowd

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Posted by Matthew Kerkhoff - Financial Sense

on Wednesday, 26 July 2017 07:16

layeredcrowds6000pxwideJohn Maynard Keynes once wrote what may be one of the most insightful observations on financial markets ever conceived:

We have reached the third degree where we devote our intelligence to anticipating what average opinion expects the average opinion to be. And there are some, I believe, who practice the fourth, fifth, and higher degrees.

Now, what exactly is he talking about?

While it sounds like Keynes may have been practicing some rare form of martial arts, or Zen meditation, he was actually talking about financial markets … in particular, how to predict them.

....continue reading HERE


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