November 16, 2010 - Vol 4 Issue 46
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Jeremy Siegel on the Upside for Equities and the Virtues of QE2
by Robert Huebscher
In our annual interview, Jeremy Siegel, the Russell E. Palmer Professor of Finance at the Wharton School, offers his forecast for equities - a 10% to 20% gain in 2011, along with a continued rally through the end of this year. He also explains why the current round of quantitative easing is exactly what is needed to stimulate the economy.
Take Your Client Relationships to the Next Level
In today's complex environment, there are new expectations for the advisor-client relationship. Those advisors that can deliver a new standard for advice that incorporates an integrated fiduciary process will lead the way by giving their clients the comprehensive advice, transparency and most importantly, the attention they seek to reaffirm their trust in their advisor. We thank Envestnet for their sponsorship.
Through the Looking Glass with Steven Rattner
by Jack Falvey
Steven Rattner, the one-time 'Car Czar' and author of Overhaul, has been busy redefining terms while trying to put his considerable spin on history. He wants to convince us that the auto industry was magically transformed from a cash-bleeding rusting hulk to a paradigm of corporate profitability. The auto industry was not overhauled. In fact, Dismembered would have been a far more accurate title. .
Are You Billing Enough on Held Away Accounts?
Thinking about billing on held away assets? Wondering how you stack up with other advisors? Check out this whitepaper to learn how other advisors are billing, where they take fees from, how much they bill and how they communicate those fees to their clients. We thank ByAllAccounts for their sponsorship.
Making Your Case to Prospects
By Dan Richards
Dan Richards contacted six advisors to see if they would be interested in working with a prospective client who had approached him. The responses from those advisors varied greatly, and revealed some very important lessons in what advisors need to do to attract new business.
A Reading List for 2010: Part 2
By Vitaliy Katsenelson
Updated for 2010 and in time for the holidays, here is the latest installment of my recommended books. I originally wrote this list in 2008 and again last year. I intend to keep adding to and revising it every year. It contains seven sections: Selling, Think Like an Investor, Behavioral Investing, Economics, Stock Market History, Risk and Books for the Soul. The first three sections were presented last week and the remaining four are presented here.
Reducing Portfolio Risk through Sustainable Investing
by Jon Quigley
By incorporating a broad swath of extra-financial data as a risk factor and tilting a portfolio away from companies with poor environmental, social and governance policies, we can better reduce that portfolio's risk of extremely negative outcomes.
Using Buy-Side Analytics to Improve Stock Selections
by C. Thomas Howard
Buy-side active equity managers regularly "put their money where their mouth is" by ranking and weighting their best stock ideas within their portfolios, and this information can be used to better identify which stocks will deliver superior future performance.
Take Disciplined Action
By Beverly D. Flaxington
Advisors struggle creating and executing a plan that supports their objectives. They don't lack great ideas, creative thinking or unfulfilled desires, but the actual steps to take - the work to be done and the assignment of who will do it - are often a big void.
Skin in The Game, Part II
By Mariko Gordon
In my previous column, I examined the validity of using the 'skin in the game' metric when evaluating a money manager. Today, we see how well it applies when used to assess corporate management. (Hint: Not so well.)
Letters to the Editor: Waiting for Superman
Two readers respond to Charlie Curnow's November 9 article, Waiting for Superman: The Fate of Teachers' Unions.
Highlights from Market Commentaries
Below are the three most widely read commentaries during the last week:
A Kind Word For Ben
The Fed makes policy consistent with its legislative mandate handed down by the democratically elected government of the United States. Price stability (mandate-consistent inflation) that promotes bubbles in asset prices and debt creation is a prescription for a debt-deflation bust and a subsequent liquidity trap. Acting irresponsibly relative to conventional wisdom is precisely the right approach for reversing an economy facing, or worst yet, mired in a liquidity trap.
Tags: US Monetary Policy
A Kind Word For Ben by Paul McCulley of PIMCO
The Quantitative Easing in the mid 1930s Appeared to have been Successful
There is much skepticism as to whether the Fed's second round of quantitative easing, QE2, will be effective in stimulating the nominal demand for goods and services in the U.S. economy. Keying off Mark Twain's aphorism that although history may not repeat, it often rhymes, perhaps we can get some guidance as to whether QE2 will be successful from the results of the quantitative easing that was initiated in the second half of 1933.
Tags: US Monetary Policy
The Quantitative Easing in the mid 1930s Appeared to have been Successful by Paul Kasriel of Northern Trust
Rising Oil Prices; Still Like Gold, But...
Oil is now challenging the $90/bbl threshold and this is more a reflection of the Fed's quest to weaken the dollar than any incipient global economic boom. As in the case of most other commodities, the Fed has unleashed the floodgates of investor speculation on the commodity complex. How can this possibly be constructive for the 90% of the U.S. earnings outlook that is not hooked to the basic commodity sector? We don't see where this is addressed anywhere in "Street" research. The economy is much more vulnerable to an energy shock now than it was in 2007.
Tags: US Europe Canada Japan China Monetary Policy
Rising Oil Prices; Still Like Gold, But... by David Rosenberg of Gluskin Sheff