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Advisor Perspectives
Insights into the world of high- and ultra-high net worth investing
October 6, 2009- Vol 3, Issue 40
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The greenest of all green shoots - the recent rise in housing prices - is
little more than a mirage, according
to Whitney Tilson, founder and CEO of T2 Partners, a New York-based hedge
fund and mutual fund manager. "It's
likely the news of home price stabilization will turn out to be the mother
of all head fakes," Tilson said. He spoke to a group
of financial analysts in Boston last week.
The retail, financial and healthcare
sectors are critical drivers of economic recovery. The
analysts at Janus examine the latest
trends in these industries, and assess which companies are best positioned to capitalize
on opportunities in both the short and long term. We thank
Janus for their sponsorship.
Last fall, Dan Richards
began posting quarter-end letters that
advisors could adapt for their own use. Many advisors have
told him that they have received an outstanding response to the letters
they sent as a result, and Dan provides a template for a third-quarter
letter. Also, sign up here for a free webinar where Dan will review how
things have changed in the past year and what advisors need to do in
response.
Whether they sell high-end designer clothing or tractors and pet
food, retailers across the country are
girding for leaner times. Consumer spending has dropped to
10% below its historical trend line, creating a landscape with far too many stores and far too much merchandise
for consumers' thinning wallets to support. Along with the
CEOs of Fortune 500 retailers,
we attended a conference in New York last week looking at trends in consumer behavior, and
we file our report.
More articles below...
The latest data for Tobin's
Q-Ratio, a valuation metric shown by academic studies to be highly predictive of market performance,
show that investors should brace themselves for sub-par returns over the next 10 years.
Kristen Luke recently attended Schwab's
IMPACT conference in her home town of San Diego. The three days offered a vast amount of information,
and she shares her five favorite
marketing lessons from IMPACT this year.
Ron Surz provides
his award-winning market commentary,
covering performance in the US and global markets, broken down by style, sector, and other dimensions.
The question for advisors is what's
going to happen to their role and how they can best adapt to a
changing world. Irrespective of the details, change will continue. Perhaps the Australian experience can provide a
few pointers for US advisors.
In our relationship-driven industry, it is critical to
understand how to best communicate with
each client and prospect. Most people assume that people want to
be communicated with in the ways that they prefer. However, as Paul Tieger
explains in this guest contribution, different
personality types require information to be communicated differently.
Lastly, we highlight submissions to Advisor Market Commentaries.
We welcome guest submissions from our
readers. For more information, here are our guidelines.
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Real estate prices are fundamentally dependent on supply and demand, and Whitney
Tilson's argument rests on several indicators that point to supply far
outstripping demand in the near term. A glut of "shadow
inventory" is not reflected in the published statistics, and it will
push housing prices lower in the coming months, Tilson said.
Green Shoots and Head Fakes in
Housing
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Analyst
Viewpoints: Market Perspectives from Janus' Seven Global Sector Teams
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In monthly
interviews, Janus analysts provide their bottom-up views on a range of
topics impacting the companies they cover, from short-term cyclical developments
to secular themes that they believe will drive long-term global sector
performance.
Analyst Viewpoints: Market
Perspectives from Janus' Seven Global Sector Teams
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A Quarter-End Letter to Send Clients
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Dan Richards provides a template that you can use as a starting point for
your own third-quarter client letter - summarizing where we've been, where
we are today and the outlook for the period ahead.
A Quarter-End Letter to Send Clients
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Retailers
Face the New Frugality
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"Consumers coming
into this recession were overwhelmed," Mindy Grossman, CEO of the $2.8
billion shopping network HSNi, told fellow retail executives last
week. She was among a group of CEOs from Fortune 500 retailers who
spoke to an audience of their peers at Argyle's 2009 Leadership in Retail
and Consumer Products Forum. Now, she says, consumers are demanding
things on their own terms and their decisions are driven by value - and
that is true from the low end to the high end of the retail chain.
Retailers Face the New Frugality
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Tobin's Q Now Bearish Long-Term
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"Given the consistently bearish historical experience when measured
over ten-year time horizons, investment managers deciding to buy equities
today at an estimated Q of 0.86 are implicitly arguing that this time will
be different," said John Mihaljevic, a former research assistant of
the late Nobel Prize winning economist James Tobin and an authority on
Tobin's Q-Ratio.
Tobin's Q Now Bearish Long-Term
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Five Marketing Lessons from Schwab IMPACT
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Kristen Luke shares five marketing lessons from IMPACT, which reinforce the
strategies she consistently advocates: Create a communication plan for your
clients; Develop a strategy to create and nurture COI relationships; Have a
plan for staying in touch with your prospects; Engage in social media
marketing if appropriate; and Contact your compliance department before
engaging in any marketing strategy.
Five Marketing Lessons from Schwab
IMPACT
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So
Far so Good: The Decrepit Decade Winds Down
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U.S.
stock markets have returned 22% thus far in 2009, bringing the annualized return
for the 9.75 years of the 2000s up to a loss of only 1.6% per year. As we
entered 2009, the nine-year average annual loss stood at 4%. A return of
17% in the fourth quarter of 2009 would bring the decade to breakeven,
and we would have posted a whopping 43% return for this year - exceptional
but not unprecedented.
So Far so Good: The Decrepit Decade
Winds Down
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Ten
Tips from Advisors Down Under
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While the markets
rose, relatively little attention was given to the fees being charged by advisors,
even though more probably should have been. But the cycle always turns, and
now so have clients, who have asked in increasing numbers (with a level of
disappointment if not anger), "What exactly am I paying my advisor?
What am I actually getting for this money?"
Ten Tips from Advisors Down Under
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SpeedReading®
People for More Productive Client Relationships
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The problem is that we don't usually have the time or tools to assess our
prospects and clients when we meet them, and we may not fully understand
our own personality types to boot. That's where learning to Speed Read
personality types can be a real asset to your practice. With a quick and
easy-to-understand guide, these hurdles may be more readily overcome.
SpeedReading People for More
Productive Client Relationships
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Highlights from Advisor Market Commentaries
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Psychology plays a big role especially at extremes in the market. Last
March we saw an extreme in bearish sentiment and the market was grossly
oversold. That marked a turning point. Are we at the other extreme now? We
would think not as the high cash level indicates that there is still
skepticism if not outright bearishness out there. It is still easy to be
bearish on the market with economic indicators recovering slowly and
unevenly. The government has taken on massive amounts of debt in the form
of stimulus programs, the unemployment picture is gloomy and the schism
over health care is a drag on consumer sentiment. We have had, throughout
history, periods of extremes in sentiment. At this juncture we believe that
Hans Christian Anderson's emperor has clothes.
"Sour Grapes" by Michael
Dana of Dana Investment Advisors
For most presidents, the expiration date for this rhetorical approach is,
roughly, two years-or the period between inauguration and the first
mid-term election. After that, "you break it, you buy it"
generally holds true. But for Barack Obama, events have conspired to vastly
shorten this honeymoon. Before the end of his first year in office, Obama
appears likely to face "break-it, buy-it" decisions on the
nuclear threats posed by North Korea and Iran, the war in Afghanistan, pinning the success of these diplomatic and military
endeavors squarely on the president's shoulders.
"For Obama's Diplomacy, the
Going Gets Tough" by Nouriel Roubini of The RGE Monitor
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Perspectives
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(781) 376-0050
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