Ken Fisher Interview Part 8
Please note: The original interview took place on Wednesday, October 27, 2010

Stockerblog: What sectors and industries look good to you?

Fisher: I’m still in the exact same place I’ve been in for quite a while. We’re in a period of where, domestically and globally, the economy will do better than people think it will do, when they don’t think it will do well, and therefore in an environment like that, the stock area that will do well are materials, industrials, the more capital intensive parts of technology, consumer durables but not consumer staples, and to a lesser extent, energy.

The parts that do worse tend to be consumer staples, health care, utilities, finance, all the things that aren’t economically sensitive.

Another way of saying it is that things that are rising right now are things that are economically sensitive. Because most people think that the economy is not doing so well. For example, something that’s perfectly observable that nobody wants to write is that nominal GDP in America is already at an all time high. It’s a simple fact, but nobody wants to write that, and if you write it, nobody will believe it. Because the mythology around us in the media is that we’re mired in a slump. ‘It’s a dismal world.’

That’s real GDP that’s at an all-time high, inflation adjusted GDP isn’t quite to its all time highs yet but it will happen in the first quarter. It’s not that far away. It’s been expanding for 14 months now. When the NBER came out and said ‘we’re officially saying the recession is over and it ended in the third quarter of last year’, the media reacted to that with catcalls.

The fact is, the economy on a global basis, with some places better than average and some places worse than average which is normal, the economy’s been expanding globally earlier than that.

Stockerblog: What countries do you think look good right now?

Fisher: Overall, the next step is you want to be overweighted in emerging markets, you want to be lightly overweight to America, and you want to be lightly underweight to the English-speaking world and most of Europe. We continue to have a world where people are skeptical of emerging markets, but emerging markets continue to do better than people think they will, with a couple of exceptions, and one of them is China. China continues to do well economically but there is so much interest in China relative to the rest of the emerging markets that the Chinese markets don’t do well, because there is too much optimism and expectation about them and excitement. Latin America, Brazil, Chile, obviously not Venezuela, the broad spectrum of Hispanic America, the broad spectrum of the rest of Asia, India, and Eastern Europe. America is slightly over-weighted because America is doing better than people think it is.

End of Part 8

The Debunkery book is available at Amazon.

Ken Fisher obviously doesn’t give individual stock recommendations in his interviews, but some stocks he likes that were mentioned in his recent Forbes columns, including high dividend stocks, are available in the form of a free Excel list at WallStreetNewsNetwork.com.

Part 1 of this interview is available HERE.

Part 2 of this interview is available HERE.

Part 3 of this interview is available HERE.

Part 4 of this interview is available HERE.

Part 5 of this interview is available HERE.

Part 6 of this interview is available HERE.

Part 7 of this interview is available HERE.

By Fred Fuld at Stockerblog.com

Disclosure: Interviewer doesn’t own any of the stocks mentioned in this interview series at the time the articles were written.

Copyright 2010-2011. All rights reserved. Reproduction of this interview prohibited without permission. All opinions are those of Ken Fisher, and do not represent the opinions of Stockerblog.com or the interviewer. Neither Stockerblog nor the interviewer nor the interviewee are rendering tax, legal, or investment advice in this interview. If you want tax, legal, or investment advice, contact the appropriate professional.

There are plenty of India stocks that US investors can buy and dividends are available on more than half a dozen of the Indian stocks that trade in the United States, according to WallStreetNewsNetwork.com. For example, Tata Motors Ltd. (TTM), a major automobile manufacturer in India also makes and markets utility vehicles, trucks, buses, and defense vehicles. It produces gasoline, electric and hybrid vehicles. The stock pays a yield of 1.1% and trades at only 7.8 times forward earnings. Quarterly revenues grew 36.8% for the quarter ending September 30. The company also has about $3.45 per share in cash.

Another Indian stock that pays a dividend is ICICI Bank Ltd. (IBN), the second largest bank in India and the largest private sector bank in India based on market capitalization. It currently yields 1.1% and has a forward price to earnings ratio of 16. Quarterly earnings jumped 79% on a revenue gain of 13.5% for the quarter ending March 31.

Wipro Ltd. (WIT) is a semi-conglomerate, which sells software services, computer hardware such as computers, servers, and laptops, and personal care products, and lighting products. It has also invested in renewable energy projects. The stock has a yield of 0.8% and a forward PE of 29. Earnings for the quarter ending September 30 were up 9.8%.

To access a free recently updated list of the India stocks that trade in the United States, about half of which pay dividends, go to WallStreetNewsNetwork.com.

Disclosure: Author didn’t own any of the above at the time the article was written.

By Stockerblog.com

Picture courtesy of David Castor.

Excellent!

Better than the first book in the series, The Girl with the Dragon Tattoo, which I reviewed a couple month ago, but the books should still be read in order.

The Girl Who Played with Fire is available from Amazon.

The term ‘noninterest-bearing transaction account’ includes a traditional checking account or demand deposit account on which the insured depository institution pays no interest. It does not include other accounts, such as traditional checking or demand deposit accounts that may earn interest, NOW accounts, money-market deposit accounts, and Interest on Lawyers Trust Accounts.

For more information about temporary FDIC insurance coverage of transaction accounts, visit http://www.fdic.gov.

Ken Fisher Interview Part 7
Please note: The complete interview took place on Wednesday, October 27, 2010

Stockerblog: There was an article recently about how some investors got early retirement, they had nothing better to do, did a lot of research on their stocks, and were very successful. The article talked about one guy who built his portfolio from $30,000 to $3,000,000. Do you think that article was about an aberration or just looking at one end of the bell curve?

Fisher: That’s looking at the very few people who are definitely one tip of the bell curve.

And it’s not the average investor that could possibly consider it unless they had an extreme amount of luck to achieve anywhere near that.

The average investor by definition cannot do that. The average investor cannot possibly beat the market. The average investor, at most, can equal the market.

Stockerblog: Speaking of playing the market, the Bunk chapter on swine flu and some of the other things. It seems like someone who trades or does short term investing could actually play the opposite of some of these bunks. The swine flu could be an example or some other major catastrophe where the market has a temporary sell-off, and if you are mentally set to go into the market to do the opposite, a trader could actually do fairly well playing to opposite of the common bunks. Would you agree with that?

Fisher: I think that’s possible but for the average person that thinks its a trade, that he or she is a trader, is exceptionally unlikely. In fact, when we look at the history of traders, most of them don’t do very well.

Said another way, if you say who are the traders we can think of that have become legendary investors, are really, really rich and successful as traders, there aren’t very many of them; although we have a lot of traders in total, which tells you that it’s another one of those things where its a tip of the bell curve where people have a knack to do that but they’re very unusual and they are probably least like our primitive stone age ancestors. They probably have the leave behavioral finance issues embedded into their brains for some reason.

But there aren’t very many of those people and the odds of anyone being one of those people is small.

If the person that can trade these things, which I do believe there are people who can do it but its not me that’s for sure, if there are people good enough to trade these, they are good enough to trade all kinds of other things.

So another one of the bunks that you will remember reading about is my comments about gold, and gold is basically a thing where if you’re a very good trader, gold might be a good thing for you but gold has had an OK return but a huge volatility over time, and 85% of history on a monthly basis has lost money, and made all its total return out of 15% of the months. If you’re a good enough trader, you should be able to trade gold successfully and you should be able to trade all kins of other things too. And you don’t need an trading advice from me, that’s for darn sure.

The fundamental nature of those rare George Soros like traders or Paul Tudor Jones type people, the people at have made money off of trading that have gotten good returns and have had some consistency, because you can trade gold, you can trade oil, you can probably trade swine flu, but most people aren’t very good traders.

End of Part 7

The Debunkery book is available at Amazon.

Ken Fisher obviously doesn’t give individual stock recommendations in his interviews, but some stocks he likes that were mentioned in his recent Forbes columns, including high dividend stocks, are available in the form of a free Excel list at WallStreetNewsNetwork.com.

Part 1 of this interview is available HERE.

Part 2 of this interview is available HERE.

Part 3 of this interview is available HERE.

Part 4 of this interview is available HERE.

Part 5 of this interview is available HERE.

Part 6 of this interview is available HERE.

By Fred Fuld at Stockerblog.com

Disclosure: Interviewer doesn’t own any of the stocks mentioned in this interview series at the time the articles were written.

Copyright 2010. All rights reserved. Reproduction of this interview prohibited without permission. All opinions are those of Ken Fisher, and do not represent the opinions of Stockerblog.com or the interviewer. Neither Stockerblog nor the interviewer nor the interviewee are rendering tax, legal, or investment advice in this interview. If you want tax, legal, or investment advice, contact the appropriate professional.

The Beatles are considered to be one of the most successful popular music bands in history, and the band’s four members, John Lennon, Paul McCartney, George Harrison, and Ringo Starr can be recited by music fans of all ages. So is there a way for an investor to jump on this bandstand?

Apple (AAPL) television commercials have been appearing since November 16, announcing that Beatles music is now available through the company’s iTunes Store, playable on iPods, iPhones, and numerous other devices. So Apple, the very successful debt free company, would be the primary way of playing the Beatles market. The stock trades at 14 times forward earnings and reported a 70% boost in quarterly earnings on a 67% rise in revenues. The company has an incredible $25.62 billion in cash, which works out to almost $28 in cash per share.

Analysts seem to favor the stock. Ticonderoga and Jeffries recently initiated coverage on the company, giving it a Buy rating, and Robert W. Baird, which also just initiated covered last month, gave it an Outperform rating.

Investors could also look at some of the Apple product component manufacturers, such as Samsung Electronics (SSNLF.PK), which makes flash memory chips and applications processors, Toshiba Corp. (TOSBF.PK) which makes iPod hard drives, and Liquidmetal Technologies Inc. (LQMT.OB), a developer of amorphous metals which have been used in some iPhones and which owned numerous patents that Apple purchased the exclusive licenses to.

Samsung trades at 14 times forward earnings and reported an 83% increased in earnings for the quarter ending June 30, on a revenue increase of over 16%. Toshiba sports a price to earnings ratio of 30. The company reported an enormous 29,000% increase in quarterly earnings on a 3% increase in revenues for the quarter ending September 30. Liquidmetal just reported earnings yesterday, announcing a 686% increase in revenues over the prior quarter. However, the company generated a net loss of 23 cents per share for the quarter.

In regards to the Beatles music catalog, which featured nearly every song written by John Lennon and Paul McCartney until the Beatles broke up in 1970, a series of owners have been involved including Michael Jackson. Jackson purchased the catalog for $47.5 million back in 1985. Ten years later, Sony (SNE) offered Jackson $90 million for half ownership of ATV Music Publishing, the holding company for the songs. The catalog is now owned by Sony/ATV Music Publishing, which is 50% owned by the Michael Jackson Family Trust and 50% owned by Sony. Sony has the right to buy out the Jackson portion at any time for $250 million.

Sony/ATV receives as much as $45 million per year from Beatles songs. Sony’s share, at $22.5 million, represents about 2.4% of Sony’s income.

Sony has a forward PE ratio of 20. Latest quarterly revenues were of 4.3% and earnings were 94 cents per share versus a loss during the same period last year. The company has about $16 in cash per share.

Paul McCartney and Ringo Starr, the two surviving members of the band, recorded a song together ‘Walk with You’ which is the lead single from Starr’s most recent album ‘Y Not,’ distributed by Universal Music Group, a division of Vivendi (VIVDY.PK), the digital media company based in France. Vivendi also owns Mercury records, the United Kingdom distributor of McCartney’s album ‘Good Evening New York City.’ The stock has a PE of 36, and reported an 8.5% increase in sales but a 38% drop in earnings.

Interestingly, the US distributor of ‘Good Evening New York City’ and McCartney’s 21st studio album ‘Memory Almost Full,’ is distributed by Hear Music, owned by Starbucks (SBUX), the largest coffeehouse chain in the world. The stock trades at 26 times earnings and sports a yield of 1.6%. Earnings for the latest quarter were up 86% on a 17% rise in revenues.

Of course, the ticket sellers are benefiting from McCartney concerts. As a matter of fact, fans crashed the Ticketmaster servers due to huge demand for McCartney’s Mexico City concert in May of this year. Ticketmaster is owned by the worldwide concert promoter Live Nation Entertainment, Inc. (LYV). Live Nation has a forward PE of 285.5 and reported a 2.3% increase in quarterly sales but a 26% drop in earnings for the quarter.

For a list of all the stocks in the Beatles portfolio, which can be downloaded, sorted, and updated, go to WallStreetNewsNetwork.com.

Disclosure: Author owns AAPL and LQMT.

By Stockerblog.com

With the recent turn of events in the global economy since late 2008, a number of investors who have relied on stock trading to make their fortunes have now turned to the precious metals market as a hedge against inflation and to help secure their financial portfolios. Investors have long been aware of the fact that gold and silver can be excellent investment vehicles, especially when stock trading markets become as unstable and volatile as they have in the past couple of years.

How Gold and Silver has Reached an All-time High Value in Recent Years

In the past couple of years since the U.S. stock market suffered during the 4th quarter of 2008, the price of both gold and silver has increased dramatically. The performance of gold and silver as investment vehicles can often be compared to stock trading because of their fundamental differences. However, to understand the effect of how investing in precious metals affects the stock markets, you have to understand how a stock market crash affects the price of the metals. Typically, the fears that are generated by a major market decline affect the price of gold and silver in a positive fashion.

You have to remember that the price of gold and silver is driven by supply and demand as well as pure speculation like most stock trading commodities. Conversely, and unlike other commodities, the disposal or hoarding of precious metals plays more of a significant role in how the price decreases or increases than what the actual consumption of them does. Most of the mined gold that is still available is found in the form of either bullion or jewellery.

By the end of 2004, about 19% of the worlds global reserves of gold were being held by the central banks and other official organisations. Additionally, there are other factors that come into play where the price of gold and silver are concerned. In the past, political tensions and the trade deficit have devalued certain currencies, especially the U.S. dollar. When this happens, people will shift their investments to precious metals to give them an advantage over what the economy and the stock markets are doing.

Gold Investment Options

Where gold and silver are concerned, there are a number of investment vehicles that an individual can consider. The primary ones are bars, coins and ETFs or Exchange Traded Funds. The most traditional form of purchasing gold is in the form of bars. These are easily purchased at the major banks and typically carry a lower premium than gold coins, hence their popularity. On the other hand, gold coins are the most common way of owning gold.

These are priced according to what is referred to as their fine weight. They are influenced by supply and demand factors as well. Gold ETFs are investment products that are traded much like stocks but with considerably less investment risk attached to them. ETF shares can be sold by the investor to other investors or the investor can sell the shares or units back to the ETF.

I am thankful that I live in the technology age, where I can use a small electronic box called a computer to analyze my stocks and trading techniques on something called a spreadsheet.

I am thankful that I live in the information age, where I can get stock quotes instantly without having to call a broker, and I can get all kinds of financial data and up-to-the-second news about stocks I am interested in.

I am thankful that I live in the communication age, where I can connect with my brokerage firm and fellow traders in numerous ways, such as instant messaging, texting, tweeting, and chat-rooming.

I am thankful that I pay less than $10 per trade for commissions, unlike the old days, when I was subject to minimums of $35 to $100, plus add-ons depending on the number of shares.

I am thankful for the bid and asked spreads narrowing to as little as one cent, unlike the old days when it used to be one quarter of a dollar, or occasionally one eighth of a dollar.

I am thankful that I can easily trade internationally, with the ability to buy most major publicly traded companies around the world, and still pay the same low commission.

I am thankful that I can now easily trade a type of mutual fund called an Exchange Traded Fund, which I can buy and sell several times in one day.

I am thankful that I can buy bearish funds through an ETF, which allows me to diversity with a short position without the unlimited risk of shorting a stock.

I am thankful that I can buy funds through an ETF that can give me double and triple leverage, without having the risk of margin calls.

I am thankful that there is so much free instantaneous adjustable charting software available, unlike the old days when we had to wait for our outdated daily and weekly chart books to arrive in the mail.

I am thankful that the commissions on options are so low, allowing me to do spreads that could only have been profitable to market makers back in the old days.

I am thankful for all the option software currently available for free through my brokerage firm that helps me analyze and choose the best collars, iron condors, and other option trading strategies.

I am thankful that I can have money transferred from my brokerage account to my bank account without a fee and quickly, sometimes in as little as 24 hours, unlike the old days, when I had to wait for a check to be sent across country and arrive in my mailbox.

I am thankful that I live in a free enterprise country that allows me to trade stocks freely.

By Fred Fuld III at Stockerblog.com

Ken Fisher Interview Part 6
Please note: Interview took place on Wednesday, October 27, 2010

Stockerblog: In regards to Congress, in your book, you do show the analysis of a change in parties and how it can affect the market, but have you done research on Congressional changes from one party to another?

Fisher: Those don’t matter much. What matters is do they have power to pass or not.

It’s really not whether the Republicans are better or the Democrats are better. When you move from one party has got the power to nobody’s got the power, the market likes it better.

Let me put it this way. Markets really don’t like political change. They don’t like having legislation. It doesn’t matter if it’s legislation that the Democrats would prefer or legislation that the Republicans would prefer.

So if you take the time period like the 1994 midterms with the Republican revolution, that worked really well because the Republicans didn’t have big margins when they won, in 1994. They had a big election to get there but they didn’t have big margins, and then they had a Democratic president who could veto. So not much got done after that.

This time we’ll have the same thing. Almost certainly, the Republicans will take the House of Representatives. (ed. note: interview took place Oct. 27) The Democrats won’t have any margin and won’t be able to pass anything, and the Republicans will pick up steam, and while its very unlikely they will take control of the Senate, with one House in one party and another house in another party, it’s like what Ronald Reagan had in 1983.

Stockerblog: Now Bunk Number 36, I think most investors, obviously incorrectly, fear higher taxes. This is the one about stocks love lower taxes.

Fisher: We kind of talked about this before. Those fears are already priced into the markets.

This can be done one of two ways. The one people are worried about now is the sun-setting of the so-called Bush tax cuts. Everybody knows that’s fair and have had a lot of time to react to it.

Let’s step back for a minute. The United States is part of the world is important, but it’s not the only part of the world, and of the United States, more money than not isn’t taxable than is. Most of the money that’s taxable doesn’t get sold anyway, like Bill Gates owning shares in Microsoft or me owning Fisher Investments. It’s not like a stock that you’re going to turn around and sell right away. And then the people that are taxable investors, if you think about it now after what we’ve been through in the last few years, not that many of them have a lot of capital gains to take. If they wanted to take them and realize the gains, they have had all this time to do it before the tax change occurs. So it’s not like they didn’t have lots of lead time.

So you can say, who in their right mind if they’ve got a thousand shares of stock X at a big capital gain, and they want the lower rate, who in their right mind is holding off until after the change. The selling’s all done in the here and now. The odds are that the market doesn’t have a problem with that moving forward.

There’s this part that I find amazing, which is the arrogance of presuming that an investor sees something that pretty much every other investor ought to be able to see, and from that, you continue to see that its a smart economic decision. That might be true outside of the world’s capital markets but the whole role of capital markets makes that impossible.

End of Part 6

The Debunkery book is available at Amazon.

Ken Fisher obviously doesn’t give individual stock recommendations in his interviews, but some stocks he likes that were mentioned in his recent Forbes columns, including high dividend stocks, are available in the form of a free Excel list at WallStreetNewsNetwork.com.

Part 1 of this interview is available HERE.

Part 2 of this interview is available HERE.

Part 3 of this interview is available HERE.

Part 4 of this interview is available HERE.

Part 5 of this interview is available HERE.

By Fred Fuld at Stockerblog.com

Disclosure: Interviewer doesn’t own any of the stocks mentioned in this interview series at the time the articles were written.

Copyright 2010. All rights reserved. Reproduction of this interview prohibited without permission. All opinions are those of Ken Fisher, and do not represent the opinions of Stockerblog.com or the interviewer. Neither Stockerblog nor the interviewer nor the interviewee are rendering tax, legal, or investment advice in this interview. If you want tax, legal, or investment advice, contact the appropriate professional.