Ticker Sense

Laszlo Birinyi on CNBC

Laszlo Birinyi will appear on CNBC at 1:00pm EST today (April 5th) to discuss stock selection and his view on the bull market in US stocks.

Laszlo Birinyi - FT Column

"The Equity Bull Rally Is Just Pausing For Breath"

Be sure to read Laszlo Birinyi's recent column scheduled for printing in the 3/24/11 issue of the Financial Times.  Click the link below for direct access to the publication:

Laszlo Birinyi - Financial Times column

Reminiscences Portfolios Beat the S&P 500 by 393% over 15 years!

Reminiscences, published monthly by Birinyi Associates, includes three recommended investment portfolios.  These portfolios are named for the investment style on which they are based: Conservative, Growth and Trading.

A $10,000 investment in any of Birinyi Associates' three recommended portfolios has outperformed the S&P 500 by 170% since the mid-1990s.  The trading portfolio has gained 457% or the equivalent of $45,700 versus the S&P 500's 63.8% gain over the same period!  

Birinyi Associates tracks these returns from the opening price following a recommendation, so it is very easy to emulate the results.  The portfolios never include more than ten stocks, and there are usually only four trading recommendations, so the capital commitment is easily adjustable to anyone's needs.

Reminiscences, the monthly newsletter by Birinyi Associates, is available for $22.99 per month.  Birinyi's trading names are already up 5.57% in 2011!  Click here to learn more and subscribe today.

 

Returns since 1996:

Conservative    88.4%
Growth            118.1%
Trading            457.0%

S&P 500          63.8%

 

 

 

Dislaimer from our lawyers:

The performance information shown herein is hypothetical and represents past performance, which is not a guarantee of future results.  The above chart is for illustrative purposes only.  Individual investor results may have varied significantly.  The above chart was created to show the returns that would have been generated if investments had been made on the basis of recommendations made in Birinyi Associates’ monthly newsletter, Reminiscences, and investors should not assume that their investments would have returned a similar amount.  The performance results shown were calculated assuming the purchase of 100 shares of each security when it was initially recommended and that each security was held until its removal from the newsletter portfolio.  No adjustment has been made for the effect of commissions, taxes, fees or other expenses.  As a result, performance for the specified periods with respect to actual investments may have differed materially from the performance information herein.   

Hypothetical performance results have many inherent limitations, some of which are described below.  No representation is being made that any account will or is likely to achieve profits or losses similar to those shown.  In fact, there are frequently sharp differences between hypothetical performance results and the actual results subsequently achieved by any particular trading program.

In addition, hypothetical trading does not involve financial risk, and no hypothetical trading record can completely account for the impact of financial risk in actual trading.  For example, the ability to withstand losses or to adhere to a particular trading program in spite of trading losses are material points which can also adversely affect actual trading results.  There are numerous other factors related to the markets in general or to the implementation of any specific trading program, which cannot be fully accounted for in the preparation of hypothetical performance results and all of which can adversely affect actual trading results.

Market index information shown herein, such as that of the S&P 500 (an index of 500 of some of the largest and most liquid publicly traded U.S. stocks) is included to show relative market performance for the periods indicated and not as standards of comparison, since these are unmanaged, broadly based indices of U.S. public equity securities which differ in numerous respects from the composition of recommendations made in Birinyi Associates’ monthly newsletter, Reminiscences.  Market index information and other information presented herein was compiled from sources believed to be reliable; however, Birinyi Associates does not make any representations or guarantees hereby with respect to the accuracy or completeness of such data.

Birinyi Associates’ monthly newsletter, Reminiscences, is prepared and circulated for informational purposes only and is not intended to provide specific investment advice or recommendations to any particular recipient.  The recommendations made herein do not take into account the particular investment objective or financial or other circumstances of any individual investor.  Neither the recommendations made herein, nor the graphs, charts and formulae presented herein, can, by themselves, guide any investor as to what securities should be bought or sold or when to buy or sell them. 

The terms “Conservative”, “Growth” and “Trading” are used only as reference points to the Reminiscences newsletter portfolios and are not meant to imply any degree of risk.  All investments involve risk and since no one investment is suitable for all types of investors, it is important to review investment objectives, risk tolerance, tax liability and liquidity needs before choosing a suitable investment.  

 

Birinyi In the News

In case you missed them over the past week, Birinyi Associates was featured in many prominent business articles.  Check out our firm's latest views and qualms as reported by the press:

 

Investors Get in a Lather Over Tech
Echoes of Dot-Com Craze Reverberate as Money Pours in to Start-Ups; One Big Difference: Profits

Making Sense of Market Forecasts
Most prognosticators miss the mark—but there are ways you can profit from their predictions.

Market Predictions, With Many Grains of Salt

What Do Stocks Really Return?

Birinyi Associates Topical Study #40: What Do Stocks Really Return?

The stock market's comeback in 2009 has probably reinforced the old adage, "the market always comes back".  That view has received considerable currency from Jeremy Siegel's book, Stocks for The Long Run (SLR), which details the performance of the US market since 1802, and contends that over any long period stocks will outperform.

Recent efforts by us and others have at least called that into question (especially when adjusted for risk), while a WSJ column questioned the availability and veracity of data.

We undertook an analysis of Jeremy Siegel's Stocks for the Long Run.  The Financial Times recently commented that this work was "influential in persuading asset allocators to put a big weighting toward equities."  We found Siegel’s effort to be lacking in data, details, and methodology in addition to other shortcomings.  In fact relatively little of the book deals with the title.  It may well be, as Barron's has suggested, useful for the 'amateur' investor as it covers some basic topics but with little depth.

We are not enthusiastic regarding this book and its conclusions for reasons which include:

• We find little evidence that the author undertook basic, roll up your sleeves research.  The book depends heavily on a 1989 study for the NBER by William Schwert which in turn was a "cobbling" together of a number of other prior studies varying greatly in terms of composition and methodology.
• Earlier researchers suggested that pre-1871 data was not available.  Siegel defended his publication by noting that other, more recent, analysts have found the historic data to be available; however, one study's data was not as complete as suggested, and in one instance had a huge error in data collection.
• Indexes and measures which overlapped those used by Siegel often have differed substantially from those Siegel used. 
• The data used in SLR showed an average annual price gain of 2.9% for the 200+ years; his total return result, 8.3%, was achieved by an aggressive dividend assumption, in excess of that suggested by other analysts.

Investors should be aware that there are issues in index collection and compilation.  We have found instances where DJIA data is incorrect by a significant factor.  And S&P, not only historically but as recent as 2004, has had issues with which we disagree.

Our experience is that academics, like other analysts, are prone to what we term "a propensity to financial bias;" they should be more rigorous, detailed, and searching; rather than accepting a given and contending that it is a truth.  

Subscribers to Birinyi Associates' Mini-Institutional service have already received an electronic version of this 40 page study.  All Birinyi Topical Studies are available to current and future subscribers.  Click here for more information regarding equity research by Birinyi.

Re-Read "the next CRASH"

the next CRASH was written and distributed to Birinyi Associates' clients in August of 2007.  In it Mr. Birinyi questioned the rationale behind structural changes such as decimalization, ECNs, and increasingly more complex trading strategies and vehicles.  As a result of the essay, Birinyi Associates arrived at the conclusion that "the markets in the first decade of the 21st century are prone to systemic failure as a result of technological innovations and utilization, rapid growth of sophisticated but not necessarily vetted instruments, and other changes in the wide world of finance...We believe the various structural reforms of the 1990s have not achieved the desired effect with regard to the individual." 

We continue to wonder why nobody is PISSED.  These kinds of market gyrations have not occurred since the 1930s, and as much as international financial markets have been disrupted, changes to the structure of the stock market have gone seemingly unnoticed.  Specialists and the services provided by the New York Stock Exchange have been removed from the picture causing market anomalies that are detailed in the publication, but have also been highlighted here.  What we have witnessed over the last two months is the culmination of flawed and short-sighted complex instruments and theories. 

Below we highlight some recent charts depicting huge market irregularities that went largely unexplained.

 

  

  

  

  

Additional information has been posted on this blog over the last year, visit these posts for more:

Google's 9/30 Activity: What If OOPS Doesn't Cut It

Ruling Out Speculation in the Oil Market

Financial Sector Has Best Six Day Move EVER!

S&P 500: Yet Another Cause for Concern

The SEC Uptick Rule Change: Bad Timing for a Bad Idea

S&P 500 Calculation Error

Upticks: More Freedom, Less Security

Taking Off the Collar (and the leash)

Birinyi Associates continues to be on the forefront of market research and analysis.  Their work and commentary is featured by Forbes, Reuters, Bloomberg, the Wall Street Journal, Barron's and the New York Timesalmost daily.  To stay ahead of market developments, macro trends, and market scuttlebutt that isn't mentioned in the news many investors, traders, institutions and individuals turn to Birinyi Associates.  Click here to learn more about Birinyi's newsletter and one of the finest research products available, the Mini-Institutional service.

Birinyi In the News

Laszlo Birinyi will appear on CNBC today at 3:30 to discuss volatility in the US equity market and strategies going forward.

Three Stocks Expected to Decline

Over the past year analysts at Birinyi Associates have developed a proprietary new trading program used to identify stocks as they gain negative momentum.  This program has identified a select few stocks, only 15 out of the S&P 500 names in the last year, 13 out of the 15 have been down over the following week for an average decline of -5.9% over the week.  Some of the previous stocks are highlighted below, subscribers of Birinyi's Mini-Institutional service received the three new stocks via email already this morning.

Click here for more information about the Mini-Institutional service by Birinyi Associates, or call us at 800-357-4468 for details.

Birinyi In the News

Laszlo Birinyi appeared on Bloomberg TV this morning to discuss the US equity market with focus on financial and energy stocks.  Click here to read Bloomberg's report.

Birinyi In the News

Laszlo Birinyi will appear on Bloomberg TV tonight (June 25th, 2008) to discuss the US Equity market and this month's newsletter, scheduled to be published at 5pm.