Tag: Tim Melvin

3 Reasons To Quit Trying For The Impossible With Your Investments

Posted on by The INO.com Team

By: Tim Melvin

Imagine that, back in January, you were given an ironclad forecast of how the world and economy would shape up in the first half of 2014.

You would have known in advance that the U.S. GDP would have a negative print for the first quarter, that Ukraine would explode into violence with Russian involvement -- and that the much-touted housing recovery would begin to show signs of slowing down.

You would have known that Iraq would see sectarian violence, and that Islamists separatists would successfully attack major cities and seriously destabilize the region. You would have had information showing you that the prices of important food items like coffee, hogs and cattle would experience double-digit price surges.

Related: 5 Smart Money Managers Taking A Shine To Gold Miners

You would have foreseen the strict, new environmental regulations imposed on industry and utilities. The slowdown in retail profits and decline in consumer confidence would have been no surprise to you, because you would already be in the know about these things. Continue reading "3 Reasons To Quit Trying For The Impossible With Your Investments" →

Flying High With Apollo And Affiliates

Posted on by The INO.com Team

By: Tim Melvin

The top executives of Apollo Global Management (NYSE:APO) in the most recent earnings call outlined some areas where they see opportunity in the years ahead.

Benzinga covered this last week in an article revealing the company's thoughts on credit, energy and real estate services.

The management team at Apollo can trace their history in the markets all the way back to Michael Milken and Drexel Burnham Lambert, at one time a wildly successful private equity and alternative investment firm.

Apollo Global founder, Leon Black, was the head of Drexel's mergers and acquisitions department and formed Apollo Global following the collapse of Drexel in 1990. Their advice is worth listening to and best of all, Apollo has some publicly traded entities that allow investors to take advantage of their insights and ideas. Continue reading "Flying High With Apollo And Affiliates" →

The Futility Of Attempting to Predict The Markets

Posted on by The INO.com Team

By: Tim Melvin

We live in a world full of predictions.

People are always predicting things like the weather, the outcome of hurricane season, sporting events and, of course, the stock market. The scary part about all these predictions is how often they are wrong -- and how often individuals rely on them. If humans were such great predictors of events, there would be more far more successful investors and wealthy gamblers.

As a bonus, no one would ever get caught outside without an umbrella. The future is unknowable for the most part and making guesses is not a productive way to live or manage money.

Even those with the very best data and computing power are usually wrong more than they are right. Consider the amount of brain and computing power that goes into predicting the weather every day -- and how often they are just plain wrong. Some little unexpected wind gust a hundred miles of away and, instead of a nice sunny day, there can be a deluge of rain. Continue reading "The Futility Of Attempting to Predict The Markets" →

Successful Investors Read, And Read A Lot

Posted on by The INO.com Team

By: Tim Melvin

Warren Buffett and Charlie Munger have commented many times in the past about the need to read widely and often to achieve investment success. "I have said that in my whole life, I have known no wise person over a broad subject matter area who didn't read all the time -- none, zero," Munger commented at the 2003 Berkshire Hathaway (NYSE: BRK-B) annual meeting.

"Now I know all kinds of shrewd people who by staying within a narrow area can do very well without reading," he added, "but investment is a broad area. So if you think you're going to be good at it and not read all the time, you have a different idea than I do. . . . You'd be amazed at how much Warren reads. You'd be amazed at how much I read."

When Warren was asked by an interviewer how he achieved success he held up a sheaf of papers and commented, "Read 500 pages like this every day. That's how knowledge builds up, like compound interest." This is an underappreciated talent in today's investing world. We flock to seminars and meetings to learn how to pick stocks and analyze markets using charts and pictures, without developing the knowledge of what is driving the price moves.

Get Your Nose In A Book

Continue reading "Successful Investors Read, And Read A Lot" →

Think Small Banks For Big Profits

Posted on by The INO.com Team

By: Tim Melvin

The banking industry avoided the attention of activists, for the most part, as the industry was still recovering from the financial crisis and the regulatory outlook was very uncertain.

Buyers were unwilling to step up to the plate, absent some clarity of what the future would like from a regulatory point of view. But according to a recent Harvard Law School forum, that is all about to change.

A post from William Sweet, partner and head of the Financial Institutions Regulation and Enforcement Group at Skadden, Arps, Slate, Meagher & Flom LLP stated that, “with resolution of some of these uncertainties, and some improvement in the bank M&A environment (which is becoming more active among smaller community banking institutions), banking organizations can expect greater attention from activist investors.

This could be a real boon for investors in the smaller community banks and thrifts. In a presentation at the recent Value Investing Congress in Las Vegas, Richard Lashley of activist investing firm PL Capital pointed out that industry fundamentals have almost returned to pre-crisis levels, but the stock prices of the smaller banks are still very cheap when compared to tangible book value. Continue reading "Think Small Banks For Big Profits" →