Sunday, July 06, 2008
There has been an interesting thread in the media over the last few days that ties in with something I have been theorizing about on this blog for several years now.
The Up and Down Wall Street column in Barron's cited a report from the Bank of International Settlements and came up with;
As Philippa and Doug (from the Liscio Report) sum up the message in the BIS annual, it increasingly looks "like the evermore freewheeling financial environment that we've taken for granted for the last 25 years is behind us." Or, as the Bank declaims "has run its course."
Also in Barron's was an interview with Harold Evensky which was titled Building Portfolios For A World of 2.5% Gains. The only thing I think I need to add to that is that 2.5% is his idea of what real returns will be.
As this has been a concern of mine for a while I obviously read with great interest and wondered whether I might have been on to something with this notion. But then I found this from the FT by Tobias Levkovich making a case (although he takes a very narrow route to this theory that I think misses the forest) for a similar equity environment. I can't recall Tobias being right about anything in this stock market cycle and that he might come to the same conclusion does work against the theory.
Be that as it may I hope that after all this time of my writing about infrastructure, airports, farmland, currencies, hydro funds and on and on you have started to expand your horizons in terms of what you have learned about.
I write about a lot of these alternative type of things, far more than I buy, because I think it is very important to learn as much as possible as opposed to learn about something and then just buy it. There is nothing wrong with learning and then saying no.
I wrote about the plane leasing stocks awhile back, if memory serves I locked onto these when Babcock & Brown Leasing (FLY) debuted. I think it is fair to say my take all along has been I'm interested, they are risky, give them some time and fortunately I never bought as they have all been decimated (including the one that made the best impression on me because it paid no dividend).
I am still interested in them and I do believe that at some point it will make sense to own one that caters to airlines from smaller ascending countries but at this point I'm not sure when that will occur but of course I could continue to be wrong about them.
More content will start to cover these sorts of things as time moves on, as there is recognition by more people that SPY/EFA/IWM will not cut it for helping investors to have enough money when they need it. Bogle and Morningstar notwithstanding, the sooner people grab onto this the better served they will be.
One related update; this past week I tried to buy one of the farmland companies but couldn't get it done. It was a small foreign name, I figured the quote (correctly I might add), padded my limit by a reasonable amount (so based on price it was executable) but Schwab just could not get an execution unless it went to the foreign market which would have made the commission, IMO, exorbitant. Back to the drawing board.
One announcement of sorts is that I am starting to do some writing for a site called greenfaucet that will be mostly about ETFs. I had one article post there the other day and plan to turn one in tomorrow that maybe will post on Monday. I am still with TheStreet.com as well. For now I'm just feeling things out with greenfaucet to see if I have the time to create original content and if the content I create is something they even want.
The picture is from a few winters ago when the propane truck fell in a sinkhole very close to our property.