Mobius Sees Derivatives Leading to Another Crisis

Templeton Asset Management’s Mark Mobius says the continuing use and growth of derivatives in financial markets is going to lead to another financial crisis. “There is definitely going to be another financial crisis around the corner because we haven’t solved any of the things that caused the previous crisis,” Mobius says, according to Bloomberg. “Are the derivatives regulated? No. Are you still getting growth in derivatives? Yes.” Mobius says, however, that crises mean opportunity. “With every crisis comes great opportunity,” he said, adding that when markets crash, “that’s when we’re going to be able to invest and do a good […]

Herro on Strategy, and Why He Likes Japan

Top fund manager David Herro says discipline and longer-term thinking are keys to successful investing. “You have to be grounded, first of all,” Herro tells WealthTrack’s Consuelo Mack. “You have to have a very sound investment philosophy from which to operate from. And number two, and perhaps most importantly, is you have to apply discipline. All too often people might have a sound philosophy, and then the moment that philosophy hits a little adversity, they abandon it, and they run.” Herro also says his investment approach focuses on finding cheap stocks of quality firms. He says he looks for cheapness […]

The Piotroski Method: An Overlooked Guru Turns Up Overlooked Gems

Every other issue of The Validea Hot List newsletter examines in detail one of John Reese’s computerized Guru Strategies. This latest issue looks at the Joseph Piotroski-inspired strategy, which has averaged 8.2% annualized returns since its inception more than seven years ago, over a period in which the S&P 500 has returned 2.0% per year. Below is an excerpt from today’s newsletter, along with several top-scoring stock ideas from the Piotroski-based investment strategy. Taken from the May 27, 2011 issue of The Validea Hot List Guru Spotlight: Joseph Piotroski If you haven’t heard of Joseph Piotroski, you’re not alone. He’s […]

Keep It Simple with Global Blue Chips

While many investors dabble in commodities and currencies, Joe Rosenberg, chief investment strategist of the Loews conglomerate, says to focus on large-cap U.S. multi-national stocks. Rosenberg tells Fortune that he looks for companies that are financially sound, showing rising profits, and selling inexpensively relative to profits and free cash flow. Among the specific criteria he uses: Market cap: Greater than $10 billion Earnings growth (before interest and taxes) in past five years: Greater than 5% Avg. return on capital over past five years: Greater than 12% Free cash flow yield: At least 6%

Great and Expensive or Good and Cheap?

While stocks with great growth stories often attract investors’ attention, Jim Oberweis says companies that aren’t quite as attractive but have better stock valuations can be a better investment. “As much as I love businesses with seemingly bulletproof growth stories, it is the combination of business quality, growth opportunities and stock price that really matters when it comes to returns,” Oberweis writes in his latest Forbes column. “A good business at a really cheap valuation might trump a great business at a very high valuation. The key lies in understanding a business’ flaws and assessing if the valuation properly discounts […]