Forecasting The Stock Market: A Fool’s Game

It’s that time of year again. We are entering the season of vacations, family reunions, boating, fishing, golf and everything else that makes summer time one of the best times of the year. We are also entering the summer doldrums in the stock market where volatility seems to always rear its head. Almost every summer the end of the world occurs. Last summer it was Brexit. It was going to destroy Europe. The summer of 2015 it happened in August when China’s growth was over, and the country’s progress into a developed market was over. The forecasts that come out generally discuss the stock markets bull run ending, the economy going into a recession and gold becoming the best investment possible. At this point in time, when this volatility occurs, you will also be email bombed or receive some other type of advertising from newsletter writers all predicting “the end”.
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Categories: Strategy.

Mistakes: Everyone Makes Them, The Average Repeat Them, The Greats Learn From Them

Mistakes. Everyone makes them. The greats learn from them while the average joe repeats them. In this week’s Market Commentary we are talking about how some of the best money managers ever have made mistakes and how learning from them is what made them great. And let’s just say this – in the midst of a bull market, like we’re in, mistakes become more common place and euphoria can take over. Doesn’t mean don’t ride the bull. Just means that we should be applying the rational, thoughtful, time-tested lessons of managing money described in the video. So watch the video and assess yourself on how well you learn from investing mistakes. What We’re Reading 5 things I’ve learned from Charlie Munger – David Clark shares the 5 things that he’s learned from Buffett’s right hand man, Charlie Munger. We can’t focus on just one because all five are just fantastic!
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Categories: Market Commentary and Markets.

What We Learn About Contrary Opportunities From the Peanut Butter Bear Market

In this week’s video commentary we’re talking about the lessons of the Peanut Butter Bear Market. Haven’t heard of the Peanut Butter Bear Market? Well it has some great lessons about when we should be building our portfolios and taking advantage of opportunities. It’s a great lesson in how a contrary view can completely change the game for the wise investor. So please watch and enjoy learning about what peanut butter can teach us. What We’re Reading What Works on Wall Street. This is a Google Talk by Jim O’Shaughnessy. O’Shaughnessy is the author of one of our favorite books, “What Works on Wall Street.” This is one of the better one hour educational videos we have watched recently. We Can Get Great Advice, But the Decision is Up to Us. Carl Richards of the Behavior Gap, discusses how, when it comes down to financial advice, it’s up to you!
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Categories: Contrarian View and Markets.

If You Fail to Plan, You Plan to Fail

What a glorious time to be invested in the stock market! The market has rallied 14% since the election on Nov. 4, the major indexes have rallied to hit all-time highs. We are far from the “euphoria” that Sir John Templeton discusses as being the end of a bull market. Despite all the good news, it’s impossible to know with certainty when it will come to a screeching halt. The hardest thing to do—we may even call it impossible—is time the market consistently. Someone may get luck once, or maybe even twice, but to time it again and again is a fool’s errand. At Iron Gate Global Advisors, we have what we call a “Bear Market Game Plan.” It’s part of our process that we implement when that Bear Market rears its ugly head. Below are a few of the characteristics of our plan. Know when to sell your stocks:
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Categories: Markets, Personal Finance, and Strategy.

Value Investing The Right Way: Four Keys To Buying a Stock

For the past twenty years, we have been perfecting the science of picking stocks. Since the early days of our firm, our methodology has improved dramatically and continues to do so every year. Like every investor, when we first started in this industry we searched and searched for the one “system” that would produce the results we were looking for. The easier this system, the better for us and our clients. In our attempt to find a single system, we learned one thing: there is no easy, simple, or ultimate system. In fact, we learned that the work that needed to be done to analyze a stock was long and exhausting . . . but well worth it. What we have deduced, however, is that there are four keys every stock investment should have. We did not invent these four things. They are core principles that investors, including Warren Buffett,
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Categories: Markets and Strategy.

The BIG Fallacy: ”No one cares about your money more than you do.”

You’ve all heard it. It’s been said over and over by anyone trying to sell you a trading service, software, newsletter, or anything similar: “no one cares about your money more than you do, so sign up today!” However, if there is one thing that over fifteen years of working with people has taught me it’s this: that phrase couldn’t be further from the truth! Let me explain. For 10 years, I worked for the biggest and best investor education company in the world today. Early in my career with that company, I was the one that used to utter that same phrase to anybody and everybody. I honestly thought it was true…until I saw what people actually did with their own money. Below are a few examples of what I’ve seen people do with their own money. Destroy their chances of a retirement because of some option or stock
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Categories: Personal Finance.

The Next Apocalypse: Or What The Media Wants You to Believe

This month’s market commentary video is chalk full of fun topics at the top of everyone’s mind. Like: After this bull run is the market cheap or expensive? Should I invest now or hold back? How do I deal with the (next) apocalypse the media is touting? As always we have an Iron Gate perspective that I believe you’ll appreciate. Enjoy the video. What We’re Reading You’re not as good an Investor as you think you are: In celebration of the Bull Market’s 8th birthday, one of our favorite writers, Jason Zweig, discusses how psychology can wreak havoc on investors as they try to go at it alone. The Downfall of the Popular IPO: With Snapchat going public this week, we’ve heard a TON about IPOs. In fact, I was on the ski lift and the ski instructor started talking about Snap’s IPO! Uh oh! Here’s a great article by
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Categories: Market Commentary, Markets, and Strategy.

Buffett’s Hedge Fund Bet: How Iron Gate Compares

Every spring, Warren Buffett releases his annual letter to shareholders. The wisdom that Warren Buffett gives, and the simple way he gives it, has made his annual letter one of the most widely read documents dealing with investing and the markets. At Iron Gate Global, it’s certainly one of our favorite annual letters, and this year was no exception. Proper capital allocation, the good and the bad about companies buying back shares, how great America as a country is, and the importance of low-fees were among the several topics Buffett discussed this year. However, one topic that stood out to me was his update to the big Buffett bet. In Buffett’s own words, he describes the bet: In Berkshire’s 2005 annual report, I argued that active investment management by professionals – in aggregate – would over a period of years underperform the returns achieved by rank amateurs who simply sat
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Categories: Markets and Strategy.

The Major Portfolio Threat Hiding In Plain Sight Of Most Investors

Over the last few months, I have reviewed over a dozen portfolios for individuals who weren’t clients but needed more clarity on their current portfolio. Within thirty minutes of looking at their portfolio, we—analysts at my firm and I— can determine the overall risk and forecasted return on a portfolio. Though I never wish to speak ill of other advisors, I have consistently seen one key mistake in people’s portfolios that is losing them far too much and giving them far too little. When we analyze a portfolio, we do this by stress testing the portfolio against bullish and bearish markets, analyzing its sensitivity to interest rates, and reviewing the expenses. The last of these, expenses, are what is driving me insane (and what I mentioned in the last paragraph)! Let me explain. There are three types of expenses that most people incur: An Advisor Fee. This is the fee
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Categories: Personal Finance.

Putting the Bull Market Into Perspective

The stories are starting to appear in the press again. We read and hear them every time the market makes a bullish (upward) move. They all sound similar and usually have the phrase “the market is moving too far too fast,” or “this is the longest bull market in history; it can’t last.” To anyone saying or thinking something similar, it’s to you that we are writing this week’s newsletter. Recently, we read an article called “Anatomy of a Bull Market” by Just Sibears. While you can, and should, read his article, we will summarize a few key points that we would like our readers to know. BULL MARKETS Regarding the current bull market, which started in March of 2009: This is currently the 7th longest bull market and 6th strongest in history. For it to become the longest in stock market history, it will need to continue through the
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Categories: Markets.