Barron's Online has a neat article by Mark Hulbert, famous for tracking the performance of investment newsletters. Hulbert focuses on Charles Allmon, who's been writing the Growth Stock Outlook newsletter for decades, and Allmon's approach to value investing.
Frankly, I didn't even know if Allmon was still putting out his newsletter. I've never subscribed myself, but have seen copies in the past and they're excellent. I did used to own shares of a closed-end fund Allmon started in the 1980s. It was called Growth Stock Outlook Trust. The linked Hulbert article says Allmon has been mostly 80% in cash since 1986. That sounds correct, because GSO Trust was 80% in cash the several years I owned it.
In fact, because the cash level could be confusing for a fund with "Growth Stock" in its name, the fund changed its name to the Charles Allmon Trust.
Back to the linked article. Here's part:
What would Graham be advocating now? You might think that he would be increasing his equity exposure, since the number of stocks selling for less than two-thirds of per-share net current assets is starting to grow. But Allmon, at least, remains firmly in the bearish camp, continuing to recommend that subscribers have more than 80% of their equity portfolios in cash.
He wrote recently that "our country appears to be on the brink of the biggest financial firestorm in our 220-year history." Expressing little confidence that the government will get us out of this mess, he adds that "the trick now is to avoid being scalded in a sea of nonsense."
Read the linked article for the three stocks Allmon recommends.
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