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Raymond James is out with 12 financial resolutions for 2014. 1. Update your balance sheets, asses your goals and see what adjustments you need to make to meet them. 2. “Review your budget and spending habits.” 3. Make sure you have titled your estates properly. 4. Make sure you have updated your beneficiaries. 5. Make sure you have “easily accessible cash reserves for six months.” 6. Make sure your asset allocation is in keeping with your financial goals and that you are comfortable with your risk exposure. 7. Evaluate how secure your sources of retirement income are. 8. Make sure your social security returns are correct. 9. “Review the tax efficiency of your charitable giving.” 10. Make sure your retirement plan is on track and if it isn’t assess the changes you need to make. 11. Make adjustments to your portfolio if needed. 12. Make an appointment with your advisor to review your portfolio.
Scott Moore’s Fund Invests Like Buffett (Bloomberg News)
Warren Buffett famously said, “put all of your eggs in one basket and then watch that basket.” Bloomberg News’ Lewis Braham thinks Scott Moore, founder of Nuance Investments follows this principle quite closely. “It is a classic value strategy similar to Warren Buffett’s except we don’t hold companies forever like him,” Braham told Bloomberg. “We’re trying to identify businesses that are No 1 or No. 2 in market share in their industries. We do a thorough analysis to see if they have a sustainable competitive advantage. “
“We try to buy them when there’s a transitory problem causing their earnings power to be depressed below normal levels. We calculate what the stock should be worth when earnings recover to normalized levels and what the worst case scenario could be. If the potential reward far exceeds the downside risk, we buy.”
The Upcoming Earnings Season Will Be Interesting (Business Insider)
For Q4 2013, 94 companies have issued negative earnings guidance, though the amount by which the companies have lowered expectations has been below average, according to FactSet’s John Butters. Meanwhile 13 companies issued positive EPS guidance. “The market has reacted negatively in aggregate to the negative EPS announcements issued by S&P 500 corporations during the fourth quarter,” he wrote. “For the 94 companies that have issued negative EPS guidance for Q4 2013 to date, the average price change (2 days before the guidance was issued through 2 days after the guidance was issued) was -1.5%. This percentage is nearly double the average of -0.8% recorded over the past five years.”
Interestingly however the market also reacted negative to positive EPS announcements issued by S&P500 companies in Q4. “Of the 13 companies that have issued positive EPS guidance for Q4 2013, the average price change (2 days before the guidance was issued through 2 days after the guidance was issued) was -0.1%. This percentage is well below the average over the past five years of +3.0%. In fact, this marks the first time since Q4 2008 (-0.2%) that the average price change for companies issuing positive guidance has been negative.”
Barry Ritholtz put out his 2014 predictions. Here’s a breakdown for the U.S.
|Dow Jones Industrials||No idea|
|S&P500||WTF are you asking me for?|
|10 Year Bond||Could not fathom a guess|
|Fed Fund Rates||Haven’t a clue|
|US Housing Market||That’s a really good question|
|Inflation||Not a clue|
|GDP||Yes, we will probably have a GDP|
|Possibility of Recession in 2014||Possibility & Probability are 2 different things|
Essentially that’s just Ritholtz saying it’s a fools game to predict what will happen in the near term.
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