Color Schemes, Closet Indexing and Office Supplies

It has been a busy week around Chez Melvin. Wedding properties appear to be swinging into high gear as the wife and eldest seem to spend a lot of time on the phone talking about things like color schemes, seating arrangements and such. MY wife even asked me the other night if I had a tie that matched the wedding party colors. Now, I rarely wear a tie so I have no idea what ties I do or do not own anymore and I could not tell you the wedding party’s colors if my very life depended on it. MY major job (payment) in this wedding is over and my sole remaining duties are to get her down the aisle without tripping and not to noticeably tear up during the father -daughter dance

In the midst of all this 13F filings are starting to trickle in and I have been coming thought them carefully in search of ideas. Several of my favorite deep value and activist investors have reported early and the selling seems to be very selective buying and position trimming. I have not quantified it yet but my anecdotal evidence s that the value types are selling more than they are buying right now. The selling appears to be of the cutting position size than the bailing out wholesale of stocks that are really overvalued type. As always I will be reviewing 13F activity in both the next edition of the bottom Decile Report as well as the Banking on Profit Monthly due out next week. Portfolio specific trading activity will be in the regular editions of BOP and The Deep Value reports tomorrow and next Friday.

Since 13fs became available online some years back I have made it a habit to randomly select a few dozen reports a day during 13F season and just click on the report and see if I can find lesser known investors worth following. Sadly I have to report that in more than 90% of the filings I select all hold the same large cap stocks as everyone else. It is a sad statement that a lot of people are paying management fees for what I little more than index tweaking or in many cases cloning. If you want index returns buy a cheap index fund. If you want to try to beat the market over time you have to look towards deep value or a mix of deep value and earnings/price momentum managers. Both of those styles beat the market over time and are uncorrelated so you should get higher returns with lower volatility from that approach.

Money and investment shows are a vice of mine. I used to always got to the ones in DC and now I never miss going to the Orlando show at least once. I usually have friends who are presenting or exhibiting and this year is no different. I have been at the Gaylord Palms a couple of times already this week and am heading back in the morning for breakfast with an old friend and I have at least one other quick meeting. However my real joys at money shows are office supply shopping and eaves dropping.

I head for the exhibit hall at some point and collect my year supply of pens, pencils. Highlighters and whatever else the various companies are giving away. I was delighted to see that a certain mutual fund company was back this year because they give away fantastic pens . The financial companies give away much higher quality free swag than most events so I will be well stocked for 2015 by the time I leave.

While I am stocking up I like to listen to the various sales pitches and investor responses going on at some of the booths. I am not saying these nice men and women aren’t sincere and honest but I am not saying some of them don’t have prison in their future either. The vast majority of the salespeople are honest folks and the firms are reputable but I have heard some doozies over the year especially from some of the real estate, oil and gas and precious metals deal purveyors

The technical analysis guys are hysterical to listen to as they walk folks though various chart patterns that pretty much work all the time except when they don’t or invalidated by some other signal that may or may not occur. If you listen closely and track what the vast majority are saying it comes down to a straight up coin flip initiated buy one line crossing the other. The one impression that I leave with every years that investor education is woefully lacking and many hard working people looking for answers are going to be disappointed. There is a reason that individual investors under-perform the market so badly and the type of products and systems you see being aggressively pitched are a big part of the problem.

Have a great week everyone

Tim

You review all of the offerings stems and programs pushed at these shows you may very well find that you are

https://www.youtube.com/watch?v=m5vGOP2arYs

Posted to The Tim Melvin Deep Value L… on Feb 05, 2015 — 3:02 PM
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