Some quick observations and stray nuggets this morning.Barron's had an interview with Derek L. Young who is the CIO at Fidelity. The article implied that most of his attention is devoted to asset-allocation portfolios which judging by the tone of the interview is primarily fund of funds products.
It was striking that Young acknowledges that portfolio construction is evolving (described differently in the article) to take in more asset classes and market segments. While I am no fan of fund of funds or target date products it is a huge positive for Fidelity clients that the leadership thinks in these terms. Whether too cynical or not a mammoth mutual fund company sticking with the status quo seems more likely.
Another article included a mention of South Gobi Energy Resources (SGQRF) which is traded in Canada. It turns out that the company is a coal miner in Mongolia that "that trucks all of its output to the Chinese border to fuel its neighbor's insatiable appetite for electrical power."
To be clear I've never heard of the company and the reason it was written up is because it is up a ton. Mongolia is very resource rich, chances are you already know that, and at some point it will be an investment destination, maybe not for a 100 years but eventually. In the mean time over the next five years there will be "new" investment destinations that we'll be able to access easily that we cannot easily access now. How easy was it to access Vietnam five years ago? Maybe we'll be talking about Sri Lanka in 2014 (Jim Rogers has apparently taken a fancy to Sri Lanka of late).
Yet another Barron's article had perhaps the best title I've ever seen in the magazine (I go back to the late 1980s); Do You Really Need All That Risk?. With an introspection-triggering title like that does it matter what the article was about? Well it was about levered ETFs and focused on someone I think I know. An RIA named Greg Werlinich talked about his experience trading a 3X financial sector ETF for clients. I used to do a podcast every so often on WallStreet.net with this guy, I think. The name is certainly similar if it isn't this guy. Small world.
John Mauldin spread some more good cheer this week, not to bag on him so much as realize there is no way the US will ever have the political will to fix things properly in the manner that he spells out. Early in the post he talked about choices that people make with an example of how people learn (or don't learn as the case may be) as teenagers about how to make tough choices.
From the standpoint of staying on your own mat people can make prudent decisions about spending, saving, investing and other types of personal decisions in such a way as to avoid problems that apparently are hurting "millions of Americans." It is never too late to start making prudent decisions.
Lastly the NY Times had a lengthy write-up on Cesar Millan the Dog Whisperer. He really has quite a story. We are big believers in what he has to say about being balanced and the relevance of that thought as applied to all aspects of life. We tend to disagree with him about dogs living in the moment 100% of the time.
The picture is from the Grand Canyon about one mile, a little more than a mile probably, before getting to the top at the North Rim.
8 comments:
Great pic.
Using mutual funds, etf's, etc. as one-size-fits-all target dates for a "managed" retirement investment is not my cup of tea.
Certainly, cross marketing a mutual fund's products are profitable for a mutual fund company such as Fidelity. But, how can it be that everyone retiring in, say, 2030 has the same needs and wants? What about tax strategies, which will likely become increasingly important?
A competent personal financial advisor appears to be a more astute choice for those that drift towards hand holding retirement planning.
T
Think I've seen SGQRF discussed over at Bill Cara's site; Cara may have addressed it himself last year because a friend (or relative?) was directly involved with the company but am not sure. Even accepting the theme is valid (it probably is, China isn't buying every carbon-based resource it can for the fun of it) the sociopolitical environment of Mongolia would probably make this investment pretty high risk. Of course uncertainty is pretty high too so no way to really tell.
Does seems to be a fair amount of uncertainty these days. Risk and reward normally (I use the word advisedly) have a reciprocal relationship -- you have to take on more of one to gain more of the other -- but the nature of that relationship has grown more challenging and difficult to navigate; e.g., WRT our previous discussions on whether market returns really follow a normal distribution at all (doesn't seem likely for some markets at least), or jump from one normalized regime to another rather chaotically (with some possibility of detecting the bifurcation), or are simply not normal at all but rather follow some power function with fat tail a la Black Swan making the odds of radical variance consistently much higher than predicted (this is probably true of some markets).
Analyzing this is difficult enough but is further clouded by the structure and practices of financial institutions, in particular their ability to mask risk via various products they sell, risks that they themselves have largely succeeded in evading through regulatory capture and the purchase of selected political representatives (I am not simply referring to the latest round of bailouts here; attempts to blunt or destroy reforms that grew out of the Great Depression began even before they were passed into law).
Individual prudence can compensate for much but its strength rapidly dissipates outside the domain of individual control and prediction.
Photo looks like Supai tunnel, Kaibab trail -- ISTR it's closer to two miles from the rim -- a very beautiful walk but IIRC as steep as the switchbacks out of Haleakala, Maui: good for shin splints going down and some gasping going up (well, maybe a Western States 100 runner wouldn't notice given they way they define a 'day hike;' e.g., http://ws100.com/ ).
c/b two miles, the ole internal pedometer isn't quite as sharp after 18 milesXD
[lol] My ole internal pedometer starts asking me why I'm a fool a couple miles into the first series of switchbacks and gets a lot noisier later on. In consequence I take easier hikes these days.
Roger, it reminds me of the time we crossed paths at Phantom Ranch in 2006 - that time you were doing north to south and I was doing south to north.
I can personally attest that in the state I was in that high up the north rim late in the day, that 1 or 2 miles didn't matter - every step seemed an eternity.
Looking forward to moving back to the southwest next fall - Durango, CO in the lead as destination, with Flagstaff and Sedona close runners up.
But before I do rim to rim again I would need some serious training - living in CT has softened me up.
Best regards,
Wayne, ex Prescott, current Mystic, CT
Hey Wayne how've you been? Durango, nice although really many places in the Mountain Time Zone are probably just a good.
Good luck, see you on the trail sometime.
There's a good reason they call it Minegolia. While Australian miners like Rio are settling in, it is the infrastructure stocks like Leighton (LEI.AX) which look like better long term plays to me, though not at current prices.
China is buying Mongolia by the truck load.
Great post. I wanted to comment about what you had said about Caesar Milan and his great story. It's very inspirational.
I had watched it on a business show over a year ago. Great stuff.
Marshall Donnerbauer
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