Juggling Dynamite

‘Rumours’ (1977) being of course, one of the most brilliant and enduring albums of all time.  Mick Fleetwood talked to CBC about his recent memoir and new album.

Fleetwood Mac has long been associated with chaos and change, but for 47 years, there has been at least one constant in the band: the steady drumming of Mick Fleetwood.

The veteran musician joins guest host Tom Power to discuss his new autobiography, Play On: Now, Then, and Fleetwood Mac, the blues-turned-pop band’s many manifestations, and why he “felt like a whore” trying to make co-founder Peter Green play in a way he didn’t want to. Here is a direct audio link.

I was reminded of the 2013 Oprah Master Class where Stevie Nicks offered her own perspective on life before, during and after Fleetwood Mac. Different sides of the same stories are always interesting.  You can see a video clip of that segment here.

Alberta’s real estate market has been in a boom for years. Prices surging along with oil’s value. But its decline is now having a real impact on sales. Supply is way up, unlike anything seen for years. And while there are buyers, their offers are well below the asking price. Here is a direct video link.

Many people have formed the opinion that lofty realty prices will need higher mortgage rates before they weaken.  But rising unemployment can trigger a housing correction even when rates are low.  Especially when household cash savings are miniscule with debt levels at record highs…

At 27.6 the Crestmont price to earnings ratio for the S&P 500 is 98% above its historical average (arithmetic mean), putting current stock valuations at the 98th percentile of this 140 years+ series, second only to the tech wreck top in 2000.  See the yellow “We are here” dot indicated in this big picture chart from Doug Short below.
Not in Kansas anymore folks…holders of equities are snoozing inside a house that has been sucked into a Fed induced tornado, and is now swirling ’round in the sky.
Don’t be distracted by all the sell side jockeys assuring everyone that the house can swirl indefinitely.   As reminded by 720 Global’s Michael Lebowitz last week:

Thoroughbred race horses occasionally wear blinkers so their focus is on the track in front of them and not on the horses around them. Our simple advice; wear blinkers. As difficult as it is, make intentional efforts to ignore the commonly uninformed chatter of friends and colleagues and the self-serving guidance offered by Wall Street economists and the media. Do your own homework and make sure your clients understand the value of your independent analysis.

Value investing, when done objectively, offers a strategy for investors to ignore the herd. The best in class understand that wealth is preserved by avoiding losses. They are not beholden to trends or momentum, nor are they distracted or obsessed by others investments.  They simply have the courage to divest of or shun assets priced above fair value in the midst of euphoria.

Although it seldom attracts the praises of the crowd, great investors who follow this simple courageous strategy do so with confidence in a favorable outcome.