Sound Advice

 The Customer's Man . . . working for the customer, not the firm. Customer’s man was what a stockbroker used to be called. That was a time when registered representatives took pride in working for the customer and brokerage firms were less involved in client relationships. That was then. These days, those who could still be called customers’ men are few and far between. They are a small minority who have learned their trade, built strong relationships, and tailored their efforts to the needs of their clients. They recognize the benefit of putting their clients’ interests first. And then there is the overwhelming majority of today’s brokers, euphemistically known as financial advisers, whose emphasis is exclusively on the here and now. Those are the folks who took a crash course before taking a Series 7 exam, started off with the title of Assistant Vice President to be sure that folks would be impressed, then cold-called prospects ad nauseam with the hot ideas that had been de...

Ignore the folks who say "It's Different This Time" It's never different, though there are times when some of us are tempted to believe there are good reasons to think that dramatic changes taking place demand a new mindset.   Remember the New Economy of 1999-2000.   Those were the good old days when things like profit and loss statements and balance sheets no longer mattered.   Concepts were in.   Sensible analysis was out.   It was a time when we as advisers ended up in most uncomfortable situations.   Clients wanted to own whichever hot issues they had heard about, regardless of the underlying fundamentals.   Whether or not companies were making any money was of no importance.   It was the ideas that counted. For those of us who kept our heads screwed on right, our efforts to maintain some semblance of sanity by focusing on time-tested themes such as consistent growth of profits and strong financials often fell on deaf ears.   Why bu...

Why You Should Be Concerned About High Stock Prices   In the wake of the market plunge that took place in late February and March, the stock market staged an extraordinary comeback.   But even with the breaking news that vaccines now in Phase III clinical trials are showing promising results, we are all better advised to take a deep breath and put things in perspective. Let’s begin with the reality that just prior to the latest jump in prices, the Standard & Poor’s 500 Index on an equal-weighted basis was actually down for the year to date.   It gets worse since the S&P has been largely driven by the huge advances of the FAANG stocks: Facebook, Amazon, Apple, Netflix, and Google.   Ex those companies, the typical year-to-date result for most stocks was a loss between 5% and 10%. So much for talk about a roaring bull market. Given this perspective, the question to be asked is whether stock valuations are too high?   This can be viewed in two ways. ...

  “If I’d only followed CNBC’s advice, I’d have a million dollars today — provided I started with a hundred million dollars.”                                                                                                      Jon Stewart I do not have any interest in "The Stock of the Day" or why the latest news requires me to reposition my portfolio.  Yet, this is exactly what you will hear when you tune your TV to CNBC, which prides itself as being a prime source of investing information. Sad to say, CNBC's scores highest on TMI, too much information that is unrelated to any worthwhile action that I or any investor should be taking. The station’s message is little more t...