Monthly Archives: October 2010

The Path of Least Resistance

As with anything in economic forecasting, what I am about to say is at best an educated guess.  Given the present environment, where is the global economy likely to go? Any analysis like this has to contend with political factors that drive the major imbalances of the global economy.  Here are the imbalances as I […]

The Portfolio Rules Work Together

Here are the eight rules with links to my recent pieces: Industries are under-analyzed, relative to the market on the whole, and relative to individual companies. Spend time trying to find good companies with strong balance sheets in industries with lousy pricing power, and cheap companies in good industries, where the trends are not fully […]

Portfolio Rule Eight

Make changes to the portfolio 3-4 times per year. Evaluate the replacement candidates as a group against the current portfolio. New additions must be better than the median idea currently in the portfolio. Companies leaving the portfolio must be below the median idea currently in the portfolio. Many investors are undisciplined when they make decisions […]

Portfolio Rule Seven

Rebalance the portfolio whenever a stock gets more than 20% away from its target weight. Run a largely equal-weighted portfolio because it is genuinely difficult to tell what idea is the best. Keep about 30-40 names for diversification purposes. Let me begin with the last part of the rule.  I’ve gotten different reactions over the […]

The Rules, Part XX

In the end, economic systems work, and judicial systems modify to accommodate that.  The only exception to that is when a culture is dying. I have been scratching my head over all the problems in the residential mortgage market.  How can foreclosure take place, when there is no note, properly endorsed, to display?  How can […]