Thanks Roland.
I. New Investors
There have been many observations in the press that millions of new investors have entered the market in the last several years, mostly investing in mutual funds. This tendency is due in part to their belief that they either don't have the time or the background to pick individual stocks. Given the mediocrity of mutual funds in the aggregrate, many of these investors are now turning to index funds in the belief that keeping up with the market is the best that they can do. I believe that the index fund craze is the last phase before a large subset of these new investors move into a much more challanging and interesting area of investment: individual stocks.
Add to this trend the early emergence of on-line trading, internet research and forums like SI, and the market could well become a whole new ball game in a real hurry.
II. Investment Advisory Letters
Thanks in large part to the work of Mark Hulbert over the last 17 years, added to the growth of the OTC market with it's new fangled technology companies, the investment letter industry has advanced from a backwater full of characters of dubious repute to a respected source for investment ideas. The new generation of investors described above is going to make the better letter publishers (as well as Hulbert himself) VERY busy, and perhaps very wealthy, in the next 3-5 years.
The old criticism of letters from the past: "It just a crutch for people too lazy to do their own basic research." is fading fast, as the advantages of this special assistance (and the need for some division of labor in a complex market) become more accepted. Don't get the wrong idea, doing one's own research and due diligence will always be a wise step in investing, but get used to the letters and the message board posts referring to them. They are definitely here to stay.
III. CTSL & Mike Murphy
Slump or no slump, Mike Murphy and Jim McCamant (Medical Technology Stock Letter) are the formost letter-publishing experts on biotech investing today. And Murphy's long term record in tech stocks simply needs no defending here. One reason for this is that the Wall Street country club and their media lackeys have been too busy proclaiming that there's nothing new under the sun to notice that these stocks require a new and different way of determining their potential value. Miss this, folks, and you miss these entire sectors. Murphy's growth flow and M-factor measurements are an innovative way of estimating value in biotechs (which often won't have earnings for many years), or techs (which can have even large amounts of capital become worthless in a few days or weeks, simply because a competitor obsoleted their products).
We will eventually see numerous Murphy and McCamant competitors appear on the scene. The Hulbert ratings and commentaries, which have been gradually been moving closer to the front of Forbes, may become more in demand than those ubiquitous "quarterly mutual fund scorecards" that everyone (even outside the financial press) swamps us with.
I am very encouraged by all of the above. I think that those of you who read this, whether you use a letter or not, have gotten here way ahead of the crowd. That crowd is on the way in this direction, to deliver us some serious profits.
Best of luck to all. |
