Monday, April 12, 2004
One of my personal keys to investment success has been learning how "the greats" did it.
And I always like to follow up on what they're thinking now. In the latest Fortune Magazine 2004 Investment Guide, the magazine offers up "Top Picks from 50 Great Investors."
However, 40 of those picks are stocks, which I'm not particularly interested in at the moment. Why? The rule about stocks is "a rising tide raises all ships." So if the market goes up, most stocks will go up as well. However, the market is expensive by any historical yardstick. If the tide goes out (as it may), no matter how fancy my ship is, that ship will likely go with it.
But 10 of the greats had non-individual-stock ideas. Let's take a look at five of those investment tips, all set to provide us with the greatest opportunities for profit (outside of the stock market) in 2004.
1) Jim Rogers (famous hedge fund manager, www.jimrogers.com):
Bet against the dollar...
"The decline in the dollar is major and horrible, and it's going to go on for a long time," Rogers says. He recommends owning foreign currencies, like the euro (www.everbank.com has foreign currency denominated CDs).
2) Bill Gross (head of PIMCO, manages more $$ than anyone, www.pimco.com):
His investment tips? Protect yourself from inflation...
The Fed controls the money-printing press. You need to protect yourselves.
Bill's tip is to buy symbol TIP. "It's not very sexy," he says, "but safe and sensible - sort of how I think of myself" (learn more about it at www.etfconnect.com).
3) Jeremy Siegel (Wharton School professor and author of Stocks for the Long Run, www.jeremysiegel.com):
Go for high-quality dividend-paying stocks.
Siegel recommends symbol "DVY," which gets you the top 50 dividend-paying stocks (learn more about it at www.etfconnect.com).
4) Jeremy Grantham (money manager with an outstanding multi-decade track record, www.gmo.com):
Of Jeremy's leading investment tips, he most recommends buying timber...
"Timber is the only asset class that's very negatively correlated with the stock market," Grantham says. One such timber stock is PCL.
5) Robert Shiller (Yale professor, historian, and author of Irrational Exuberance, http://www.econ.yale.edu/~shiller/):
Buy real estate stocks...
Real estate stocks are a big class of assets and "should be a major part of people's portfolios," he says.
Investment Tips or Investment Knowledge: What to Do?
You're welcome to buy their picks, if you'd like.
But what I'd recommend instead is visiting the websites mentioned in this article, and learning more about each of these guys and how they think. If you find you agree with them, then read books they've written.
Reading as much as possible from the famous names really has been one of my own personal keys to success. It's how I've learned what REALLY works... and what doesn't.
You ought to give it a try too...
Good investing,
Steve
