Although just about everybody calls himself a value investor, Seth is that rare bird who really is a value investor. And like Seth himself his investment approach is unostentatious, smart, serious and painstaking. His year-end letters to his limited partners are always a joy to read and, unlike so much of the genre, enlivened by insightfulness, wit and that most uncommon ingredient -- common sense.In his latest commentary on 2009, he reflects with more than a dollop of wryness on the effects of that mother of all rallies (which, we would be derelict and ill-mannered were we to fail to mention, last week celebrated its one-year anniversary). Seth writes that the monster move has been taken as "an all-clear signal." It even, he says a tad wondrously, has rescued from the purgatory where moldy old Street sayings end up the notion that we're in a Goldilocks world for investors, one that's not too hot and not too cold.
Gentleman and scholar that he is, he submits a delicate demur to this vision of "financial utopia," pointing out that its components are inarguably a tad repulsive, encompassing as they do unyielding reduction by Uncle Sam of short-term interest rates to just this side of zero, the printing presses running all-out, all the time, and the dead hand of government cropping up everywhere -- in the financial markets, in accounting standards, in the economy.
And this on Fred Hickey, who edits The High-Tech Strategist newsletter:
In his latest missive, Fred opines that "my hunch is that this market might roll over and suffer at least a 10% correction," something he points out we haven't had since stocks took off a year ago.
He hazards that if the Fed really decides to ring down the curtain on quantitative easing that could trigger fears of rising rates, or, even worse, a chain reaction of rising rates that might unnerve investors, force Mr. Bernanke to speed up the printing presses again and cream the dollar.
In some ways, Fred's talking his book, since he's loaded with gold, to which such a sequence would add fresh glister. As for tech, although he has enjoyed some profitable trades, he now believes that, with a few exceptions, like Microsoft, Verizon, Cadence Design, and Sybase, the stocks are over-owned and no longer very attractively priced.
I obviously agree with Hickey for the most part. I own MSFT and own gold and gold mining stocks.
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