We have often explained the foundation of the growth stock theory of investing using the quotation from Thomas Rowe Price in which he advises investors to search for "dynamic, capable management operating in a fertile field of future growth."We have previously explained that one way of defining "fertile fields of future growth" is through the concept...
Thursday, August 20, 2009
The business focus of the great 20th century investors
We are occasionally asked what books we would recommend to those who wish to become better investors.In general, we would argue that many if not most books written about "investing" that you find in the bookstore and library shelves are of little real value to the investor, and can in fact be downright harmful.Because we view investing as the art...
Monday, August 17, 2009
Former analyst predicts "Nasty correction or years of treading water"
Former Merrill Lynch analyst Henry Blodgett recently wrote an article entitled "Is that finally it for the sucker's rally?"His article makes use of some interesting charts, including this one from dshort.com, which shows the recovery track of four legendary bear markets, including the most recent, the 2000-2002, the 1973-74, and the Great Depression.Observing...
Thursday, August 13, 2009
Caution: Fed oversteering ahead
The Federal Reserve continues to signal its intention to maintain a highly accommodative stance of "exceptionally low levels of the federal funds rate for an extended period," while acknowledging that "the prices of energy and other commodities have risen of late" (see full FOMC statement here).The editors of the opinion pages of the Wall Street Journal...
Tuesday, August 11, 2009
What "Sell in May / go away" has to do with the "persistent delusion"
We recently published "A Conversation with Gerry Frigon" in which longtime portfolio manager Gerry Frigon made the observation that Wall Street, reinforced by the twenty-four hour financial media cycle, has cultivated the image of knowing better, of being able to time this trend or that trend."Built into the system," he said, "is a sense of inadequacy...
Monday, August 10, 2009
A Conversation with Gerry Frigon
For further insight into the classic growth stock theory of investing, we share some quotations from an actual conversation with longtime money manager Gerry Frigon, President and CIO of Taylor Frigon Capital Management:"No one knows what they're doing, when they're trying to time the market. We've never done that. . .""Wealth is never created unless...
Thursday, August 06, 2009
"Inflection points" and the Growth Stock Theory
The financial media is currently full of market watchers speculating as to whether or not we are passing through a major "inflection point."Recent discussion has ranged from the broad question of whether now is the time to bring money off of "the sidelines" and into the equity markets, to narrower questions such as whether it is time to switch from...
Tuesday, August 04, 2009
The Poison of 1974
Cars have changed a lot since 1974, as this advertisement for the 1974 Ford Mustang II illustrates. Regardless of whether cars have come as far as they should have over the past thirty-five years, the fact remains that what was then thought to be modern and forward-thinking in an automobile looks pretty out-of-date today.However, when it comes to...
