I like how Pershing Square manages its capital base. This is a $13.7 billion fund concentrated in just 7 stocks. The names everybody knows: Amazon, Brookfield, Uber Technologies and Microsoft lead the pack. You’d expect big changes in market valuation here, namely $1.8 billion of its $13.7 billion in market value. Its static ratio is on the high side at 29.3%. Basically, if you want to play with fireworks, the cost can run too high. Portfolio names are all easily recognized,

Note huge premiums over the market for Morgan’s 1972 stock holdings. Their stocks got crushed in the 1973 recession. Then, Morgan threw out such overpriced growthies and bought moderately valued paper. No more Avon at 65 times earnings. How do shareholders of Microsoft feel after their 150 points fade-away? I’ll disregard a 10 dollar stock slipping into single digits, but a $500 growthie shedding over a hundred bucks gets some attention. There are plenty of examples. IBM for

Whirlaway wins the 1941 Kentucky Derby The good ole days of watching Whirlaway galloping down the middle of the track, holding the lead in the Kentucky Derby are long gone but a fond message of sheer athleticism, unopposed, unchallenged for some 60 years. I was curious to see how bullishly postured money managers played the opening quarter. When the market turned south, did they sit tight or run for the hills and shed assets? Before looking at the numbers, my guess is few op

If the first thing you do in the morning is check the quote on crude oil futures, you’re already Trump’s captive. Reasoning in the price of oil futures is now the leading indicator of the stock market, up or down. If futures tick down 5 bucks stocks open lower, maybe 50 to 100 basis points on the S&P 500 Index. Let oil futures tick up or down 5 to 10 dollars a barrel. I abhor energy stocks and their managements who dwell in thickly carpeted offices that remain pretty silent.

If you believe as I do that our President is still bad news for stocks, go short a bunch of bad acting growthies that already stand beat up and bleeding profusely. Some properties are already down hundreds of points from their highs of a year ago but nobody cares. Yes! There are a few sturdy performers like Coca-Cola, Johnson and Johnson, Caterpillar Tractor, Costco and J. P. Morgan, but look at the damage surrounding them. Tesla has shed 150 points past 12 months. Microsoft

It’s worth noting how low some commodity prices can plunge. I remember 18 cent gasoline prices at the pump. It was back in 1938 when the Great Depression had grabbed nearly everybody by the throat. You’d fill it up for around 2 bucks. Back then, we lived at the top of a long winding hill in Mt. Airy, New York. Motoring to work, Pop would turn off the ignition key in his 1937 Dodge sedan and coast down to the hill’s bottom. This was a poignant lesson as the Great Depression t

I awakened startled as a pretty farm framed my television screen. But, whose? I’m not a farmer. I’m a stock market operator who deals in numbers, not shovels and seeds. The market doesn’t want Coca-Cola today. It craves technology stories, even airlines. Tesla may be up 4% but United Airlines is ahead 6% and Citigroup almost 5%. What’s going on? Does the market sniff closure on the war. Trump could declare victory and withdraw our troops. I kept my fingers crossed and adde

If earnings expectations for iconic growth stocks contract below a 20 multiplier, Microsoft and its ilk wobble and sell down. Tesla, which trades some 70 million shares daily shows no late foot. Where tick the Polaroids and Xeroxes of yester-years? Over 100-point damage is spreading among growth stocks. It embraces Microsoft, Home Depot, Oracle, United Health, Goldman Sachs and Tesla. This is a who’s who of growthies. Sadly, any stock selling at 30 to 40 times earnings does g

Trump’s face on a gold coin is the crowning irony of his jagged reign. Not only has our President proved a bad businessman when he got involved in New Jersey gaming where he built a monstrous casino and hotel which later lapsed into receivership. Market bulls still need to respond to the issue of the price-earnings ratio for the S&P 500. They put it at 20 times earnings. But you award a 20 P/E only when the outlook for earnings, interest rates and inflation is benevolent. I

Once I cherished Boeing. Today it's history. I got excited about jet aircraft when Boeing introduced its 707 jetliner some 70 years ago. Douglas Aircraft introduced its DC 9 then too, but they’d underpriced it. Their backlog destroyed Douglas and they declared bankruptcy. I learned a good lesson, too much business can destroy you unless it's priced carefully for delivery. With Boeing, you worried about its machinists assembling aircraft on the floor of their aircraft assem

Structure not stock selection is what counts. I’ve sold down to a 25% long portfolio with the rest mainly in 10-year and 30-year Treasuries. I won’t own high yield corporates because I fear the business cycle leaves them much too vulnerable. Even more critical is the price-earnings multiplier for the market. We still are in the high teens while growth stocks sell at 1.5 to 2 times market’s valuation. That level of valuation should be reserved for when earnings growth runs in

From experience, any price-earnings ratio over 20 is suspect. During corrections, stocks like Tesla and Google could contract 25 to 30% with no change in their fundamentals. Historically speaking, growth-at-any-price was a disaster in the 1973-’74 market correction based on poor fundamentals for many growth stocks. Contrapuntally, the art market foolishly gave away the greatest pieces of the centuries as late as the 1950s. Van Gogh’s “Olive Trees” had to be bought in at £4,0

I watched Goldman Sachs shed 69 points, some 8% overnight. Then, there's American Express, normally a polite growth stock among the financials, giving up 26 points, nearly 9 %. All this wipe-out while the S&P 500 Index itself just down fractionally, 0.4% shrinkage. There’s Eli Lilly actually up nearly 30 points or 3%. There was money for oils but financials like Morgan Stanley flopped 7%. All such bloodletting keeps me invested in the low thirties and I bought more 30-year T

Magnificence, like the size of a fortune, is a comparative thing. Booth Tarkington in his classic novel “ The Magnificent Ambersons” posed the idea that to make a fortune while others are losing fortunes is the ultimate success story, bar none. In reviewing quarterly investment reports from filed 401k’s I keep in mind the name of the game is making money while doing better than everyone else ranging up to trillion dollar money pools that rarely excel, but like “Ole Man River

When I see airlines like United tacking on 5 points a day while prime growth stocks like Microsoft slip a dozen points overnight, I shudder then add to my Boeing position. At one point 10 percent of my assets rested in Boeing. Microsoft can bunch together plenty of sinking spills, too. Same for Eli Lilly and IBM. The conceit of playing a Nifty Fifty list rests shattered along with buying half a dozen prime growthies. They no longer exist. Eli Lilly does shed a dozen points i

After Microsoft’s haircut, some 55 points, I wondered if the old “buy ‘n hold” formula of investing still worked. Long ago, I owned American Express after it sustained the client swindle in salad oil. Buffett held on for 50 years and AXP made him super rich. I held on only for a couple of years. Just a good trade, not a mind- blowing cha-cha-cha. Early 1960s, I cottoned onto Polaroid and Xerox which made me comfortable. I loved these managements for super productive research

Microsoft sold down 48 points on its earnings release, a big surprise. Growth in its cloud division slowed unexpectedly. Nobody ever promised a rose garden would bloom and light up my day. I’ve dealt more often with garbage men who rattled up a storm with my refuse cans. You’re not supposed to fall head over heels for a stock because its middle name could be Disappointment. Maybe Apple or Microsoft can carry you for a couple or years, but sooner or later they do disappoint.

I got excited about jet aircraft more than 70 years ago. Actually, I lost my hearing jumping out of an aircraft during the Korean War. That was an early fifties experience. Nobody won. Just a “cease fire” in 1953 that is still in place. As a young analyst in the fifties, I called Boeing’s chief financial officer to arrange a visit to their Renton factory. They issued me a bicycle and I was free to tour the factory’s floor where they were assembling 707’s. A huddle of mechanic

Trump’s chop to American Express on limiting their card interest rate to 10% initially clipped it for a dozen or so points. But, no general market relapse on the Big Board emerged and AXP rallied some. Meanwhile, the constant jostling of crossed swords between Trump and the FRB goes on with no end in sight. Presidents invariably press for easement from the FRB who normally gets its way to fight inflation. I found courage to buy more AmEx, as for other tech houses, I found

Portfolios can always be a surprise in terms of stock selection and their market weighting. First, lemme say I own Berkshire for what’s largely static, 70 percent resting in Apple, American Express, Bank of America and Coca-Cola. Some 60% of invested assets here, Apple is at 22% of investments followed by American Express at 18%. This is a largely live-by-the-sword, die-by-the-sword investment construct. I’ve reached it at times, too. But don’t boast about it. Sooner or la