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reddingrunner (95.96)

March 2014

Recs

4

Buy a chunk of Sweden: Here's why...

March 25, 2014 – Comments (1) | RELATED TICKERS: EWD , EWO

First of all, the 8 cheapest stock markets in the world (be sure to read the whole article)...  [more]

Recs

7

2nd Best Way to Get Rich: Buy Stocks from Me!

March 04, 2014 – Comments (7) | RELATED TICKERS: VIPS , LCI , GPRE

Is my glass half-full or half-empty?  [more]

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4

How to hedge against a correction

March 01, 2014 – Comments (3) | RELATED TICKERS: BRK-B

http://www.berkshirehathaway.com/letters/2013ltr.pdf

Bonds are dangerous, cash loses to inflation, alternatives are a gamble.  What's the average investor to do if he doesn't want to be 100% equities? BRK-B IS an equity, but it doesn't correlate to the stock market as a whole. Check out page 1 from this year's report (link above): by WB's method of valuation, B/H has outperformed the S&P in years in which the S&P was down, by 275% (non-compounded), or about 25% a year.

25% per year! 

Only twice has B/H lost value in 50 years and the most recent, 2008, it still outperformed the S&P by 27%.

In the last 10 non-negative years (S&P up), it has underperformed by about 2% per year average.

Either way it appears to me to be a far superior alternative to holding a large cash balance as a hedge against market corrections.  (In fact, it's my biggest single holding).  [more]

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4

One of the most valuable lessons...

March 01, 2014 – Comments (0) | RELATED TICKERS: VTI

... that I've ever learned was from Joel Greenblatt in his Magic Formula book.  I'm just going from memory here, but in the book he claims that anyone can beat the market over time by following his magic formula.  Usually when a formula that works becomes well known (e.g., Dogs of the Dow), it ceases working because too many people are using it.  Greenblatt said he wasn't worried about that happening with the Magic Formula because, while it beat the market over time, there would always be periods, often as long as one or even two years (occasionally even more!), where the MF would lag the market.  When that happens, people give up on it.  [more]

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