A reader left info about Jason Trennert's asset allocation as being the following;
Equities - 75
Bonds - 20
Cash - 5
Value - 35
Growth - 45
Blend - 20
Large Cap - 93
Mid Cap - 5
Small Cap - 2
I can't vouch for these numbers but if correct the only real red flag is the style allocation. This is a very big bet on large cap. I personally would not be comfortable making this type of bet even if I was more bullish on large cap than even Jason is. BTW the reader also says that Trennert's track record has been hit or miss. Again I'll take the readers word because I don't know.
One other tidbit is about Iceland. There has been an onslaught of negative press about what will befall all things Iceland in the coming months. With so much piling on and so many people saying that have sold, I wonder if the worst is already priced in. The currency is down more than 15%. That could turn out to be the majority of the decline, from a contrarian viewpoint. The stock market is down a bunch too and may also have seen the majority of its decline.
This is not a call for anyone to buy in. I do not have any exposure for clients just personally. I think that the way it plays out could be a learning opportunity for anyone that invests in emerging markets. Sentiment was great now it is just awful. If sentiment is awful could the selling be mostly complete? I don't think you need to have skin in this game to learn from it.
A big thanks to David Gaffen over the WSJ's Market Beat Page (sub req'd) for linking to this blog. The page is a regular read for me because it captures a lot of info very concisely. Mr. Gaffen isn't even a relative!
One last nugget about USO comes from Aaron Pressman and the Businessweek blog, take a look.
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4 comments:
One could easily argue that since Iceland's currency floats rather than being supported by extensive reserves that any pain will be over and done with fairly quickly assuming their economy is otherwise reasonably sound. The scenario in a country with more extensive reserves is that the pain is much more drawn out and other aspects of the economy may actually suffer more as a result.
The minutia in these portfolio blends makes me laugh.
Who cares if it's 4% or 6%. You guys are dying in detail. I spend all my time trying to drink 0.1% of a fire hydrant's output every day, choking, worrying the other 99.9% that spilled contained valuable information. If you spent a tenth of the time trying to undersatnd the overall market trends and individual stock trends, the portfolio mix would be the last task addressed and a +-10% swag would seem precise.
Can't see the forest for the trees.
My tax CPA spends less time in minutia (he has a program that does it for him).
You can tell me an R**2 of a stock I never heard of and are unaware of Hubbert's peak theory.
Grinz!
I like the idea of using USO as a hedge against winter heating oil bills. So when will the ETF tracking LNG or just the plain gaseous stuff be out? Tom from Indiana
Appreciate the props, Roger. We're working hard over here to make this as interesting as possible.
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