What's in Your Portfolio

[Nirvana]

Farm land its better than owning others companies ..if there are live people they will always need to eat...

[tw]

Originally Posted by Nirvana

Farm land its better than owning others companies ..if there are live people they will always need to eat...

From The Economist of 25 Aug 2012:

Farmland Prices
This year's drought in America will reduce farm incomes, but the price of farmland in the Midwest has risen by almost 20% since the end of last year. Strong farm incomes in recent years (and low interest rates) have enabled farmers to pay up for land; high commodity prices have also attracted investors. The price of land in America's corn belt is ten times greater than in Canada's main farming provinces, now among the cheapest places in the world to grow grain.

Earlier on 20 Apr 2011:

Though down a bit from the highs of 2008, inflation-adjusted farmland values remain well above the last great peak of three decades ago (see chart), buoyed by strong commodity prices, low interest rates and a weak dollar. In parts of the Midwest they rose by more than 20% last year. Feeling flush, farmers have rushed to buy and cultivate more land. Inventories look likely to remain depleted, putting upward pressure on crop and land prices. Investors now account for a quarter of all land purchases in some states. ...
A rise in capitalisation rates back to their historic average would imply farmland-price falls of up to a third, estimate officials at the Federal Reserve Bank of Kansas City. ...
[FDIC] examiners are no longer relying so much on aggregate industry data, says one, but are "asking more questions of individual high-flying lenders about how they plan to mitigate the risks of a bubble bursting." They are urging banks to lend based on cashflow projections, not collateral values.

A reason for the massive recession: banks and other financial institutions failed to do their jobs; to verify an applicant could afford the loan. This 'deregulation' (approved by 'political propaganda') created one massive recession. We don't need another created by irresponsible finance people.

Review what happened in 1929 to understand why farmland prices, like house prices, do not necessarily mean a good investment.

Despite what bean counter types say, a good investment must be based in the product. Not myths so often promoted on spread sheets created by finance people. Due to finance spin, land prices may be 30% too high; a crash can be expected.

[Nirvana]

don't worry about me TW I am good

[xoxoxoBruce]

Sure, that's because you live on it and off it.

The scumbags that were playing the wall street game, until it fell apart, were looking for a new game. Some of that money has moved into farm land speculation hoping to create another bubble for quick profit. As they drive the value up, the taxes also go up, making harder for small farmers/ranchers.

Some of them have moved into the commodities futures market, bidding up the prices, which increases the cost of food for us and our animals. They're outbidding the traditional players, like General Mills and Purina who were mostly the end users interested in keeping prices down.

Fortunately they can't move the land off shore... except what washes downstream into the ocean.

[Griff]

Originally Posted by Undertoad

That may be the ideal profession to have such a stance on money.

Nobody can take advantage of your generosity until it's too late.

And the markups are so enormous you can afford to throw in a free ride now and again. There is no con as beautiful as the funeral con, put my carcass under a tree or cut it up for science.

[tw]

Adding to the chorus who sing "investment professionals underperform the market" is word from Charlie Ellis. He is only repeating what Frontline made so glaringly obvious. Actively traded mutual funds are loser.

Ellis notes 60% of actively traded funds (where the stock broker is considered informed) unperform their ROI targets. Within 20 years, 70% underperform. And within 30 years, 80% underperform.

Charlie Ellis also notes the funds primary objective is to enrich the fund manager. The almost 1% fees mean you can surrender anywhere from 30% to 60% of your investment to that manager.

Ellis also echos what informed investors have known for quite some time. Exchange Traded Funds (sometimes called Spyders) have fees as low as 0.04%. If investing in index funds, then the ETFs are a best alternative.

However better returns are averaged by purchasing stocks directly. By ignoring investment advise from those who least understand the best investment - investment professionals. By learning what to invest in by learning the company's products.

From Ellis's book:

…institutional investors will, over the long term, underperform the market because money management has become a Loser’s Game.

[glatt]

Thanks for beating this drum, tw.

I encourage anyone with a 401K or in other mutual funds to take the time to look at the fees for the funds you are in. They really are extreme in the managed funds. I also recommend the index based funds with the low fees.

I did this recently and ended up making a bunch of changes. I had been ignoring the funds for too long.

[Lamplighter]

In today's news...

Watch Out Wal-Mart? Kroger Buys Harris Teeter For $2.4 Billion Cash, Adding ...

Cash ! That's $ in their banks ! Cash !

And here we are worrying about piddling $100k student loans
.
.

[Lamplighter]

...and they say the Dow is a 6-month-out predictor of the US economy

LA Times
Andrew Tangel
November 18, 2013, 6:59 a.m.

Dow hits new milestone: 16,000

The stock market's rally has surprised even some of the most bullish prognosticators on Wall Street.
<snip>

The Dow closed above 15,000 in early May.
That was only three months after the blue-chip stock index closed above 14,000
for the first time since the financial crisis.

So far this year, the Dow is up nearly 22%.

[glatt]

Good

[Undertoad]

Top performing stocks of 2013

RR Donnelley
Delta
Supervalu
Caesar's Entertainment
Icahn Enterprises
Micron Technology
Best Buy
Rite Aid
Freddie Mac
Fannie Mae

I don't think anyone could pick these by looking at retail performance in a mall. The secret to picking these stocks would have been to find shitty stocks in 2012 that were poised expected to turn around. (Wheeee JC PENNEY 2014!! But if you read that article, you'll read that Best Buy was a mirage...)

I'm not sure Lynch wasn't pulling a fast one on us with that strategy anyway. Most companies are not public-facing enough to know whether they are on the right track with respect to fashion.

Rite Aid has been one of the worst-run companies for a long time. Are they better now?

[tw]

Originally Posted by Undertoad

Rite Aid has been one of the worst-run companies for a long time. Are they better now?

Rite Aid is an interesting company. Management in Harrisburg was operating major fraud over a decade ago. A resulting stock price dropped to $5 about a decade ago. The lady who took over instituted major reforms. Rite Aid purchased JC Penny's drug store company. Refurbished those stores. Then built many new buildings. In Central PA, the only new building in that town might be a Rite Aid. Within a year many stores were abandoned or replaced by another nearby building. Rite Aid stock dropped to well below $2. And has sat there for years. In 2008-9, stock price was so low at to risk delisting (below $1 per share).

I have not seen a new Rite Aid building or store closure for many years. As a result, Rite Aid has stopped losing $500m annually. Last year it actually showed a profit of about $100m. Rite Aid stock that spent a past 7 years at about $1 per share, has suddenly risen to $5. Far below a $60 it once sold for. Management stopping wasting money on boondoogles some years ago. Eventually profits resulted from changes. Suddenly increasing from $1 to $5 per share in one year. Stock prices changed long after management stopped building and abandoning buildings years ago. As usual, the finance reports what happened years ago.

[Big Sarge]

I'll admit my purchase of Manchester United was a huge mistake. I should have known better than buy stock in a silly game that no one really watches

[tw]

Originally Posted by Big Sarge

I'll admit my purchase of Manchester United was a huge mistake.

Expected when an American buys a team that does what he does not understand. When the purchase was only based in a foolish desire only to make profits.

Six premier league teans purchased by Americans becausehot dogs were not yet selling for $10+ and seats for over 50 quid. Their spread sheet analysis saw a future of obscene profits - football be damned.

[Big Sarge]

I wonder if I could trade my Manchester United for partial ownership of the Clippers? Maybe, just maybe, it might be worth a hot dog and a beer.