Author: Wall Street Vibes

Learn From Warren Buffett’s Biggest Mistake

This post was originally published on this siteIt’s a rare moment when Warren Buffett makes a mistake. But sometimes he does and, well, you’ve got to call a spade a spade. Even Buffett himself has admitted that he’s made some blunders. And there’s a lesson to be learned from one of his biggest mistakes: It’s never too late. In today’s piece, I’ll explain exactly what that means – and how to apply that mindset to your own investing. Buffett’s Blunder Back during the dot-com boom and subsequent bust, Buffett avoided losing money on internet stocks. At the time, he...

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Profit From the “Rodney Dangerfield” of Market Analysis

This post was originally published on this site“Market sentiment” is the Rodney Dangerfield of investing. (Among most professional investors, it “gets no respect.”) And that’s no surprise. After all… “Fundamental analysis” parses real-life balance sheets and income statements. “Technical analysis” tracks complex indicators like oscillators, stochastics and Bollinger Bands. “Modern finance” applies college-level mathematics to tease out investment insights. Investing based on “market sentiment” seems simplistic in comparison. Here’s the irony… The world’s best investors don’t just use market sentiment to make investment decisions… They believe it’s the most important factor behind their success. Buffett’s Secret Weapon Warren Buffett is a disciple of value investing legend Benjamin Graham. That puts Buffett firmly in the camp of fundamental analysis. But when asked what the single most crucial lesson Graham taught him was, Buffett cited Graham’s discussion of “Mr. Market.” In The Intelligent Investor, Graham compared the market to a manic-depressive. Some days, Mr. Market is euphoric. Other days, he’s very depressed. If you catch him on a euphoric day, he wants a very high price for his shares. If he’s in one of his down moods, he’s willing to sell you his shares for a pittance. Mr. Market highlights the only thing you can predict about financial markets… That investors will always overreact to events, whether positive or negative. Why Market Sentiment Matters So why is market sentiment the key...

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A 20% Yield Guaranteed to Be Cut

This post was originally published on this siteI typically don’t cover closed-end funds in the Safety Net column. That’s because, to arrive at a dividend safety rating, I plug a company’s data into the SafetyNet Pro model to analyze variables like cash flow and payout ratio. But closed-end funds’ data differ from typical companies’ data. A closed-end fund is similar to a mutual fund except that it has a limited number of shares and trades like a stock. Closed-end funds don’t generate cash flow. Any income they make from their investments typically fluctuates from year to year. The fund...

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Eureka Moment in My Financial Class at Chapman

This post was originally published on this siteNote From Alexander Green: My friend and colleague Mark Skousen has been a tireless, lifelong promoter of the benefits of our amazing free market system. Click here to see why publisher Steve Forbes awarded him the soon-to-be-coveted Triple Crown in Economics. – Alex I want to thank Mr. Forbes for taking the time to present me with the Triple Crown in Economics at this year’s FreedomFest. He noted that my greatest achievement was influencing the federal government in 2014 to publish quarterly my gross output (GO) statistic. I regard it as the most significant advance in national income accounting since gross domestic product (GDP) was developed in the 1940s. GO is an essential macroeconomic tool – and a better way to measure the economy and the business cycle. And now it’s an official statistic issued quarterly by the Bureau of Economic Analysis at the U.S. Department of Commerce. I first advocated GO nearly 25 years ago in my magnum opus, The Structure of Production, a book I wrote as an alternative to Keynes’ General Theory. In the newly revised third edition, I show why GO is a more accurate and comprehensive measure of the economy than GDP because it includes the supply chain – all the business-to-business (B2B) transactions that move goods and services to final use. GDP measures the value of...

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The Real Cost of Long-Term Care in Retirement

This post was originally published on this siteSome of my best memories of my Navy days are from when we were on liberty and weren’t behaving as well as we should have been. As our behavior on shore went downhill, someone would always stand up and pronounce, “We’re Americans, we can do anything,” as if that somehow justified why we were behaving so badly. It was a joke of course, and we laughed hysterically, but it is also true about us as a people. We are tough, resilient folks who have bounced back from everything. It does seem like we can do anything. I really believe that. A person in Europe once said to me, “You Americans have some of the worst weather in the world (tornadoes, hurricanes, flooding, etc.), yet you seem to bounce right back and just go on with your lives as if nothing happened.” He was right. We are a tough bunch. And that means that for many of us, it will be difficult when we can’t take care of ourselves and can’t bounce back the way we once did. For me, accepting the fact that I need help and can no longer do it alone will be one of the most difficult transitions of my life. But as our life expectancies continue to increase and our bodies and minds wear out, we may be...

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