Stock Picker's Market - Robert Olstein
As many of you may remember I've long been an admirer of Robert Olstein and his investing philosophy. He's been on the Fox News show Bulls and Bears for a few years and still appears once a month or so on the Saturday morning show. Thestreet.com runs today an interview that Whitney Tilson and John Heins did with Olstein recently.
Highlights from the interview include:
Through June '05 Olstein's Financial Alert Fund has returned an average of 15.9% annually since inception in 1995. The S&P has returned 9.4% over that same time span.
Olstein believes "It's a stock-picker's market". I don't know of many markets that weren't made for stock pickers but I believe the intent of the statement is to say that this is a difficult market, one that should be navigated carefully. Investors are going to be better off if they are able to carefully pick and choose their investments. For the time being, investing in many individual stocks may be a better strategy than buying an index or mutual fund.
From this weekends Barrons Cover story Tom McManus, the equity strategist at Banc of America Securities, favors high quality, large-capitalization stocks with diversified, defensive earnings streams. He notes the price-earnings multiple of the markets largest stocks, the top 150 companies in the broad S&P 1,500 ... Read
I came across this apparent lecture by Charlie Munger of Berkshire Hathaway fame the other day and just now found the time to read it. Munger discusses the "models" he believes are needed to develop worldly wisdom and then relates those models to the stock ... Read
In an earlier post I referenced Bob Olstein and his Financial Alert Funds success since 1995, returning 16% per year. The following is a transcription of Olsteins appearance on the Fox News Channel show Bulls and Bears on Saturday June 11, 2005. Keep in mind ... Read
Olstein's Alert it s Mid-Cap blend. The risks of this asset class are different than the S&P500 and therefore the two should not be compared. The fund did well compared to other Mid-Cap funds, it's performance rank was 32% in the past 5 years.
Unfortunately, even though this fund did better than it's peers, it still underperformed the Morningstar Mid Core TR Index (the benchmark for this asset class) by -4.16% during the latest 5 year period.
Also keep in mind that this fund's expenses were 1.42% per year (average for funds in this class).
As a point of comparison the Vanguard Mid Cap Index fund (VIMSX) beat Olstein's fund in every time period (ytd - 5 yr) and had total expenses of 0.22%.
But Olstein might be right about it being a good idea to pick individual stocks right now, especially if you know which individual stocks will outperform. I guess that's why Kramer has a tv show.
Did somebody say it's a "stockpicker's" market??? ;^D {grin}
