100 Level

Modifying the Faber Global Tactical Asset Allocation Model

As mentioned in the last blog, I highly recommend ITA readers take the time to download and read Mebane Faber's article, A Quantitative Approach to Tactical Asset Allocation. This blog entry explains a number of modifications or variations to the "Faber Model."  Faber uses five asset classes in his Global Tactical Asset Allocation model and they are as follows. U.S Equities or Stocks  -  … [Read More...]

Dow 30 And The “Delta Factor”

Normally, I reserve the "Delta Factor" analysis for non-managed index ETFs.  Deviating from that pattern, below is a table for the Dow Jones Industrial 30 stocks.  ITA followers, who are also Mosaic investors, will find this list of interest.  Are there any mega-cap stocks that show promise of price growth over the next six to twelve months? When examining a table such as … [Read More...]

300 Level

Investment Articles of Interest

Two articles of interest to investors are the following. The first article was written by Geoff Considine with the title, An Important Challenge to "Stocks for the Long Run."  Jeremy Siegel is the author of the 'Long Run' book. The second article is actually a transcript of a debate between Siegel and Zvi Bodie.  This paper can be found on one of my blog sites … [Read More...]

Bohr Portfolio Review: 18 July 2011

Shown in the first slide is the Bohr Portfolio Dashboard from the TLH Spreadsheet.  Overall, this portfolio is in good shape with respect to its Strategic Asset Allocation plan.  Once we are past the debt limit crisis, I plan to gradually build up the International REITs asset class.  Otherwise, this portfolio is well positioned in the various asset classes.  If new cash is … [Read More...]

200 Level

The Active vs. Passive Management Debate

Will there ever be a definitive answer to the active vs. passive management debate?  Likely not and here are possible reasons why we will never have a complete answer to which method is superior.  At the very core of the argument is lack of data, at least as it pertains to one level of the argument.  The active vs. passive argument is carried on at two levels.  One level is … [Read More...]

Retirement Mistake #4: Overestimating Portfolio Return

Historically, the U.S. Stock Market has returned about 7% annually in excess of inflation.  Is this likely to continue?  Real earnings come from dividends, dividend growth, and P/E expansion.  Projecting future returns to match the historical level, which included one of the longest bull markets from August of 1982 through March of 2000 is not likely to be duplicated in the near future.  Further, … [Read More...]

400 Level

Rethinking the ITA Risk Reduction Model

In late October of 2011 the ITA Risk Reduction model was introduced.  ITARR is a modification of a timing model I used as far back as the early 1980s and more recently patterned after the Faber - Richardson model explained in detail in the Ivy Portfolio book.  ITA readers unfamiliar with the risk reduction model will find it through links or searches on this blog.  It is worth a review or an … [Read More...]

Why Pay Any Attention to the Bullish Percent Indicator?

Are there logical reasons to support paying attention to the Bullish Percent Indicator?  Simply put, the Bullish Percent Indicator (BPI) draws special attention when the market or market sectors are overbought or oversold.  When the BPI exceeds the 70 percent level, it is time to be wary of the market.  Demand is high and supply is low.  Everyone that wants in the market and … [Read More...]