Bear Mountain Capital Inc.

Behavioral Finance and Investing Bias

| February 11, 2010

The CFA Institute dedicates an entire session to what drives investors behaviors.  There are three themes to this topic and I’m going to highlight the first theme they focus on in this post:  Heuristic-driven bias.   Its a fascinating subject matter primarily because all investors, whether they be inexperienced or sophisticated, fall prey to these bias’ during their investing lifetime.  Guarding against them is an ongoing endeavor. Heuristic-driven bias is based…

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Vanguard’s Jack Bogle

| February 9, 2010

Below is a link to a Morningstar article discussing Jack Bogle (founder of Vanguard) and his perspective on investing.  There are some very good points that I have also put forward when selecting funds for clients portfolios, they inlcude: ” Choose low-cost funds; don’t chase hot returns or managers; look for consistency, tax efficiency, and evidence of risk control…” Where we do not agree is his perspective on the role…

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Morningstar Fund Manager of the Year: American Funds EuroPacific Growth Fund

| January 6, 2010

Always nice to see one your key holdings in your portfolio distinguished as one of the best managers for any given year.  That was the case for the American Funds EuroPacific Growth Fund, a staple in most of my portfolios.  I believe that international markets is one of the markets that allows for managers the potential to add value over the indexes given the size and breadth of those markets…

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Bernanke vs. Taylor

| January 6, 2010

This article makes a great point in Bernanke’s support of low interest rates, while Greenspan was Fed Chair.  It also highlights how two highly respected financial minds can differ in their views on what were the real causes behind the last bubble: (Click here to read Bloomberg.com article)

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Dubai Tower

| January 5, 2010

What I like about this chart, is that it shows the National GDP of the country the year that construction was completed, and the previous 5 years before the project was completed.  It shows how usually “unthinkable” development projects are made during periods of economic expansion and how these accomplishments often peak at the same time as the relative economy peaks.  Many conclusions can be drawn about the perils of…

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Buffett

| January 4, 2010

Warren Buffett is one of the most highly regarded investors… he’s consistent, he’s focused on fundamentals, and he’s focused on long-term returns.  However, even Buffett’s investments are subject to significant decline, especially in the short-term.  Some people will argue Berkshire has grown too big, or that Buffett is getting to an age where he cannot expect to perform at his previous levels.  Although he has suffered setback this decade, he…

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Regulatory Reform

| December 18, 2009

I received the following Member e-mail from the CFA Institute.  It discusses the state of the current financial reform regulations being pushed through Congress and stresses the areas that need further attention.  I think it does a good job of highlighting the real risks that are still prevalent in the industry, even if this recent round of reforms become law.  Read below: “Dear Member: After significant debate, the House of…

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The Great Stabilisation

| December 18, 2009

This is a great article from the Economist.  It really highlights why the recent recovery is facing significant dangers ahead.  The shift from government funded recovery to privately managed recovery is a process that will be extremely difficult to manage. (Click here to read Economist.com article)

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Gold Can’t Beat Checking Accounts 30 Years After Peak

| December 7, 2009

I think this is a very timely article regarding gold prices and investment returns over the last several decades: (Click here to read Bloomberg.com article)

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BofA Repaying TARP Funds

| December 4, 2009

It will be interesting to see if other banks follow suit.   The pay czar’s restrictions on compensation, seems to be the biggest motivator for BofA to find ways to exit its TARP obligations, seeing as it has been unsuccessful at find a new CEO to lead the bank, under the current restrictions. (Click to read Economist.com article)

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