Wall Street is notorious for putting analysts (or any individual) on a pedestal when they make a prediction that happens to be correct. As quickly as their ‘celebrity status’ is awarded it is often just as quickly taken away! The recent downfall of Meredith Whitney offers a lesson that everyone can learn from.
Whitney was awarded her ‘star status’ the fall of 2007 when she made a bearish prediction on Citigroup (C) as an analyst at Oppenheimer. Shortly after she made her call the stock tumbled and the CEO, Charles Swift, resigned. She was credited with predicting the financial crisis that followed in 2008 and became a regular with the business media. With her ‘celebrity status’ she resigned from Oppenheimer in 2009 to form her own firm focused on research and hedge fund management.
It did not take long for her shining star to become tarnished as she missed on several predictions that Wall Street followed her on. She called for municipal bonds around the country to default in 2010 and then in 2013 for the central U.S. to flourish economically while both coasts would struggle. Neither came anywhere close to becoming a reality and Whitney found herself struggling to regain the notoriety that she once enjoyed. Most recently she launched a hedge fund in 2013 that she shut down just last month. Continue reading →
You don’t have to be a professional money manager to be aware that the swift decline in oil prices has been one of the most impactful financial headlines in years. As a matter of fact if you didn’t own a computer, read a newspaper, or have basic access to media, you would still know that oil has dropped like a rock. All you had to do was go to the gas station and see that it costs far less to fill up your tank today than it did last year.
What you may not have noticed, however, is the huge appreciation in the U.S. dollar. The U.S. dollar index compares the dollar with a basket of other currencies and it spiked up 50% in the first couple weeks of March. It has already risen almost 8% year to date and this has impacted the stock market in ways that many are unprepared for. With any situation like this there are silver linings and opportunities that we’ll discuss later in this article.
First let’s review where we’re currently at and what we did last month:
Here’s the current summary of the MPG Core Tactical 60/40 portfolio mix, which is updated as of this writing (April 1, 2015).
The markets are constantly moving from one headline to the next – some of them having a profound impact on the markets. Last Sunday night “60 Minutes” aired a topic that has been lurking in the shadows for years, suddenly it jumped up and grabbed headlines raising concerns and paranoia with investors. High Frequency Trading (HFT) has dominated headlines over the last week prompting a federal investigation and hours of debate.
Michael Lewis, author of “Flash Boys”, has been on a publicity tour claiming the U.S. Stock Market is ‘rigged’. Is the average investor at a disadvantage, on the outside looking in at the security exchanges? This week we encourage you to view a letter being sent to our clients and friends of the firm (High Frequency Trading letter) Continue reading →
What do you care about hoops? The stock market is stressful enough so why add the drama of collegiate basketball games coming down to the wire?
This is the fourth year publishing our March Madness Investing Bracket and we begin this years edition by wondering why is it one of the most popular investing articles on the internet? Every year this article gains in popularity and one of the best forms of a compliment is imitation. It’s actually quite flattering that others are now creating similar “investing brackets”! Is it that America is captivated by a single collegiate basketball tournament or is it that people want to know what the next hot stock is?
We believe the answer lies in the fact that people love excitement and surprises. It’s also human nature to root for the underdog and many times times those two themes can certainly play out on the basketball court as well as on the stock market floor. Much like two college basketball teams that never play each other our imaginations are swept up in wondering who will “win” between a relatively unknown penny stock or a popular stock that has the media in a frenzy.
You may be asking what does a basketball tournament have to do with managing your portfolio or the investment world in general? At first glance it may not, but we thought we would have a little fun and couple it with some asset allocation parallels. After all, there are many folks who have simply thrown their hands in the air at one time or simply succumb to the notion that investing is like educated gambling. There could be some truth to that depending on your approach… Continue reading →
Let’s begin by letting you know that the MPG Core Tactical portfolio has taken the lead over the passively managed indexed approach of the 60/40 Benchmark portfolio!
We fully realize that with investing you can “live and die by the sword” and banging your chest about performance can eventually lead to this deadly truth…or death. That being said, we are actually doing such to prove a point. As early in the year as it is, we have one stock that is a huge “stinker” in the portfolio and a couple that are knocking the cover off the ball. Many advisors drool at the opportunity to show you their homeruns but quickly skip over their strikeouts. Spring is in the air and so are some baseball euphemisms but let’s get into what is working for our portfolios and what is not:
First and foremost you should take a look at our overall portfolio mix which we have updated as of this writing on March 3,2014.
With the holiday season now in the rear view mirror U.S. consumers are being reminded of the world we live in. In the middle of the holiday shopping season Target made an announcement that had an impact on millions of individuals. On December 19th Target announced that 40 million credit and debit cards had been jeopardized by a cyber attack. Since then the number of cards has grown to 70 million, it has been reported that the number could grow to as many as 110 million! Just last week Neiman Marcus released news that it is dealing with a similar situation and other retailers are likely to be in the same boat in the coming weeks.
On Friday (January 10th) Target announced that the security issue had a negative impact on their holiday shopping results. Stores saw sales decline up to 5% (depending on location) when compared to the previous years results. When 4th quarter earnings are announced on February 26, 2014, the additional expenses the company has incurred due to the hacking incident will certainly have an impact. CEO Greg Steinhafel announced that 4th quarter EPS (earnings per share) were lowered to $1.20 – $1.30 from the previous guidance of $1.50 – $1.60. Continue reading →
Congratulations! You either hit the lottery, just retired, or are leaving a job where you will rollover your $1 million 401(k) into an IRA. For the sake of our newest monthly column and “game”…that’s the basic situation. All joking aside, this scenario plays out all too often and it’s not a game at all. Most baby boomers or high net worth investors are often faced with having to decide on what the most appropriate allocation mix is. They also may find themselves in a situation where they want smart and time tested investment advice but don’t want to be sold the “flavor of the day”.
We decided to kick off 2014 with a model portfolio (“Core MPG Tactical Portfolio”) that allows an investor to track and see what tactical adjustments we are making for our very own clients. Each month you will see how this model portfolio performs against a benchmark. You will also be able to read commentary on why certain adjustments were being made. Before we outline the initial portfolio here are some basic details and rules of the road: Continue reading →
Imagine yourself in an empty room that has three doors. This room represents the investment year of 2013 and the door that they are about to open is where they hope or think the best returns will be for 2014.
Door #1 – Bonds: Very few people are near this door. There certainly isn’t a line to open the door and most investors walking by seem smug as they peek at the lonely door along with the depressed looking people waiting nearby. It’s clear to most that the bond markets have already begun to crumble. With interest rates that are sure to rise this asset class feels like dead money and the ‘writing is on the wall’ for flat to dismal returns. Continue reading →
This won’t likely ever happen again but we want you to do us a favor and stop thinking about investments for just a minute. The following article is more important than stocks, bonds, currencies, and commodities. Please feel free to share it with those you care about:
My name is Matthew Vlad Pixa and I’m the founder of My Portfolio Guide, LLC. We are an independent Registered Investment Advisory firm based in Seal Beach, CA with another office in Denver, CO. The rest of the words that follow here have very little to do with the firm but rather a vision and a cause that will not only knock your socks off but will change the life of somebody who truly needs the help. Continue reading →
How great would it be to have a job where you could constantly deliver results short of expectations and never have to worry about being fired? What if you could always simply blame your lack of performance on random external forces or global events? Imagine if you had a yearly performance review that went something like this…
“You missed your target goals by 28% and were wrong more often than you were right! Nice work, we are going to give you a bonus and a 10% raise!”
This doesn’t happen in the real world…or does it?! The financial services industry has become notorious for overpaying executives even when the company itself is struggling to survive or is even on the verge of declaring bankruptcy. For example, Richard Fuld of Lehman Brothers was one of the 25 best-paid CEO’s for eight years straight – right up until his firm collapsed in 2008. It has been called ‘”the largest bankruptcy in history”; it triggered a chain reaction that produced the worst financial crisis and economic downturn in 70 years! What about professionals in the financial industry that consistently underperform but are not at risk of losing their jobs? Continue reading →