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In 2017 thus far, the only thing more dominant than the L.A. Dodgers may be large cap growth investing.

Through July, large cap growth is up over 17%, beating the S&P 500’s impressive 12% return. At the other end of the spectrum, small cap value investors have seen a minuscule 1% return, as seen in the chart below. But there’s something eerily familiar about these year-to-date results …

A SMOOTH RIDE IN Q2
But Don’t Fall Asleep At The Wheel

On May 16th, there was a Wall Street Journal column by Jason Zweig that may have gone unnoticed, if not, underappreciated. The article discusses Amazon’s 20th birthday as a publicly traded company. Since its IPO in 1997, Amazon generated a total return of nearly 49,000%, or over 36% annually for its shareholders. No doubt that a performance number of 49,000% will make anyone stop dead in their tracks, either in amazement, disbelief, or both. But the rest of the article had some far more important points that may not have sunk in for most readers.

We’ll return to this story later, but suffice is to say that the Amazon story was likely lost among the many negative stories that embodied the most recent quarter. In this issue of Portfolio Matters we’ll discuss what all these moving parts mean for investor returns and, more importantly, the future for our clients and friends…read more

Ready for the next market correction? Today’s drop rekindles questions of whether this bull market is finally over. To be sure, stocks are up over 7% in the first 4 months, extending the 8-year run from the 2009 low.

But the bull market run has resulted in some expensive prices. Regardless of whether one uses multiples relative to sales, book value, trailing earnings, or normalized earnings, stocks aren’t cheap. The Shiller P/E ratio, which compares stock prices to normalized earnings over a 10-year cycle, is at its third highest dating back to 1887. The top two instances were 1929 (before the Great Depression) and 1997 (during the Tech Bubble).

Many business owners envision a successful sale in the future. But how many have walked through a term sheet, all its nuances, with their peers in a risk-free environment?

Attendees at Day 2 of our “Selling Your Business” program can now count themselves in this camp.

“Every deal is unique and has its own detours and surprises, but selling your business has discrete steps that all business owners should know.”

This how Kevin Cudney, M&A attorney with Brownstein Hyatt Farber Schrek, opened last week’s “Selling Your Business” program held with Janiczek Wealth Management.

selling business event
And Kevin should know. His latest deal in which he worked with Janiczek’s Brian O’Neil to help a couple sell their $11 million landscaping business closed that very morning, and it included its own 11th hour dramatics.

Thumbnail PM 041217Is The Market Getting Ahead of Itself?

I recently attended an event at which General George W. Casey spoke to a crowd of emerging business, civic, and non-profit leaders. General Casey served as U.S. Army Chief of Staff and was Commanding General of the Multi-National Force in Iraq from 2004 through 2007. He described his experiences in the Middle East, and his words offered some key truths for us all.

In his remarks, he referenced the “vuca” world in which we live: volatile, uncertain, complex, and ambiguous. He then stated how important relationships are to the success of any objective in such a world, in his case, peace in Iraq.

Passive indexing has long been popular among the smaller investors. But wealthy investors often pursue more active strategies, either with active managers or on their own. After all, they didn’t accumulate their wealth by sitting back and doing what everyone else does, right?

But the evidence against active management is strong, with the most managers failing to beat the index over time. So why do wealthy investors tend to shun a passive approach to managing their money?

JC Blog 032217

It’s a foregone conclusion in the markets that the Federal Reserve will raise short term interest rates on Wednesday. But more importantly, investors will be looking for hints for future rate increases.

Why is this so important? The consensus view is for 2-3 Fed increases this year, but anchoring into this expectation comes with risks. For example, in 1994 the Fed surprised investors by increasing rates 6 times, resulting in a 3% loss for bonds that year. Of course, bonds recovered in following years, thanks largely to the long-term trend of falling interest rates since 1981.

fed funds futures pricing

warren blogBerkshire Hathaway’s Warren Buffett released his annual letter to shareholders last Saturday, a publication that is examined and dissected by investors around the world. And this year’s edition underscores why.

Before its release, the S&P 500 closed at its all-time high (again), continuing its rally that began in November. In fact, in the first 38 trading days of 2016, the S&P 500 has posted a new high 11 times. The Dow Jones Industrial Average and Russell 2000 Index have printed new highs 14 and 3 times in 2016, respectively.

Even the greenest of investors is likely aware that stocks move in both directions, and that periods of upswings have historically been followed by downturns. The Holy Grail, of course, is how to invest through all the ups and downs, and Buffett offers his view:

Blue Chip StocksToo much of a good thing can be wonderful, at least, if actress Mae West was right. But when it comes to your investments, we’d argue too much of a good thing can be downright
dangerous.

Consider what’s going on among blue chip stocks in today’s low yield environment. Anyone seeking income from bonds knows that yields are at historic lows. As such, many investors have sought blue chips stocks and their healthy dividends as an equivalent to traditional bonds. We don’t believe this to be a terrible idea, but it definitely comes with its tradeoffs and we question whether those risks and rewards are getting the attention they deserve today.


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*Ranked/Named among Top, Best and Most Exclusive Advisors sources: Barron's March 2016, 2015, 2014; Advisory HQ March 2016; Financial Times June 2015; Five Star Professional November 2015, 2013, 2012,2011, 2010, 2009; Mutual Funds Magazine January 2001; NABCAP September 2010, 2011, 2013; Worth Magazine July 2002, January 2004, October 2004, October 2008; Wealth & Finance International, October 2014. Rankings and/or recognition by unaffiliated rating services and/or publications should not be construed by a client or prospective client as a guarantee that he/she will experience a certain level of results if Janiczek & Company, Ltd. is engaged, or continues to be engaged, to provide investment advisory services, nor should it be construed as a current or past endorsement of Janiczek & Company, Ltd. by any of its clients. Rankings published by magazines, and others, generally base their selections exclusively on information prepared and/or submitted by the recognized adviser.

Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Janiczek & Company, Ltd.), or any non-investment related content, made reference to directly or indirectly on this website will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this website serves as the receipt of, or as a substitute for, personalized investment advice from Janiczek & Company, Ltd. To the extent that a viewer has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. Janiczek & Company, Ltd. is neither a law firm nor a certified public accounting firm and no portion of the website content should be construed as legal or accounting advice. If you are a Janiczek & Company, Ltd. client, please remember to contact Janiczek & Company, Ltd., in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services. A copy of the Janiczek & Company, Ltd. current written disclosure statement discussing our advisory services and fees is available upon request.

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