Author Archive

• Taking The Gloves Off On The Discussion of Rational Investment Analysis (Part 9) Absolute Investing: Not An “Accredited Investor”? Build Your Own Hedge Fund With ETFs – Part 1
  IRON100, August 31st, 2010 at 4:00 pm, Comments: 0

  Part 9 of my discussion on rational investment analysis deals with how "the rest of us" can compete with sloppy bearish domestic (U.S.) equity markets and the growing yet insanely volatile emerging and established world equity markets by building one's own hedge fund.

• Taking The Gloves Off On The Discussion of Rational Investment Analysis (Part 8) Absolute Investing: Hedge Funds (A Quick Wrap-Up)
  IRON100, August 22nd, 2010 at 12:01 am, Comments: 0

  What I want to do in this post is to simply wrap up the discussion on hedge funds as a means of absolute return investing, which we discussed in Parts 6 and 7. I want to respond to a couple of e-mails regarding the idea that hedge funds have not been good investments over time. In aggregate that might be true, but what good investors have to do is research to find the best investments. Let’s discuss that for a moment.

• Taking The Gloves Off On The Discussion of Rational Investment Analysis (Part 7) Absolute Investing: Hedge Funds
  IRON100, August 15th, 2010 at 6:01 am, Comments: 0

  Hedge funds are defined broadly as shown in Investopedia here. (Use the legal definition above for accredited investor and not Investopedia's). What hedge funds do is to go after returns (either long or short) as they appear in the market, according to their individual strategy. Though the name "hedge fund" would make it sound as if each trade or position within the fund would be hedged against loss, this is seldom if ever the case. Hedge funds could be long only (that is profiting from buying assets and selling them at a profit), short funds (which means selling assets, stocks, or futures contracts to cover them later at lower prices to gain from a decrease in price), or long-short strategies (which would combine long and short strategies for profit). Realize that, though long-short funds sound like they are hedged, they too are NOT because the balance of long and short positions may not be equal. At times, a long-short fund could be positioned 100% in longs or 100% in shorts, depending on that manager's strategy. There are quantitative strategies, funds of funds (that is, a combination of funds invested into one other fund managed by a separate manager), and about any kind of strategy one can imagine.

• Taking The Gloves Off On The Discussion of Rational Investment Analysis (Part 6) What about today’s environment? How Can One Invest Smartly?
  IRON100, August 8th, 2010 at 12:01 am, Comments: 0

  I guess I keep delaying the discussion of traditional forms of investing (those of value investing, trend following, and growth investing) because the current environment in which we exist (one of potentially higher than historical price/earnings ratios and potentially rising interest rates (and certainly LOW interest rates by any American historical standard), does not always lead to success as it might in a traditional secular bull market. What I discussed in the current environment (according to research provided by Unexpected Returns -Understanding Secular Stock Market Cycles, a book by Ed Easterling) is the environment of a secular bear market. Historically, and certainly currently, the market is composed of either sideways or downward rotation in stocks and stock sectors and comprised of many periods of volatile price action.

• Taking The Gloves Off On The Discussion of Rational Investment Analysis (Part 5)
  IRON100, August 1st, 2010 at 12:53 pm, Comments: 0

  Let's first understand what is typical of secular bull markets and secular bear markets, and what kind of investing might work best in these environments.

• Taking The Gloves Off On The Discussion of Rational Investment Analysis (Part 4)
  IRON100, July 25th, 2010 at 1:09 pm, Comments: 0

  After getting a couple of questions via e-mail, I have decided to quickly in this post discuss one more dour piece of "long-term" investment news for those with the "buy-and-hold" strategy. I do not do this just to frustrate optimists, but simply to set up the discussion of how to invest in various segments of market cycles. This kind of analysis is always helpful in navigating the often tortuous environment of equities. I find this very apropos this morning, as I just watched David Gregory quiz Treasury Secretary Timothy Geithner about the possible future "less than adequate" investment returns to be offered by stocks.

• Taking The Gloves Off On The Discussion of Rational Investment Analysis (Part 3)
  IRON100, July 18th, 2010 at 12:36 am, Comments: 0

  I am going to continue to provide some additional shades of meaning to the dilemma of how returns in the stock market are generational in nature (that is, they go through cycles that can last a generation). I will also discuss, via the works of Ed Easterling of Crestmark Holdings, LLC, how volatility can skew compounded returns (the only way to measure real growth in equities) to numbers far lower than are reported, and how those volatility cycles can be exacerbated by, of all things, life happening to investors (college, home, expenses, etc).

• Taking The Gloves Off On The Discussion of Rational Investment Analysis (Part 2)
  IRON100, July 11th, 2010 at 12:01 am, Comments: 0

  On this, the 101st post for this StockTwits blog, I wanted to begin the whole discussion regarding whether a simple "buy and hold" strategy is always the best idea when investing in stock indexes (index funds or index related exchange traded funds (ETFs), or even in individual stocks.

• Taking The Gloves Off On The Discussion of Rational Investment Analysis (Part 1)
  IRON100, July 4th, 2010 at 12:01 am, Comments: 0

  I want to blow the "buy and hold" orthodoxy off of its mooring by demonstrating some very basic concepts regarding longer term valuations and trends (measured in months and years), that make true common sense if one has the courage to understand them.

• The Coming Implications of Higher Interest Rates (How One May Adjust A Portfolio For Them)
  IRON100, June 27th, 2010 at 12:01 am, Comments: 0

  As many retail investors abandon the stock market for what they think are "safe" returns offered by bonds, what they fail to realize the potential risk to investment principal (the amount invested) that is caused by an interest rate rise. With mounting Federal, state, and even local deficits, all bond categories (U.S. Treasury Bonds, State General Obligation Bonds, and even local municipal bonds) are facing lower tax receipts with the slowdown in the economy.