Edward Lampert, Sears Holdings, Mexico discussed on Networth Radio
Mcgowan group asset management a, sir. John award is after sir. John Templeton, one of the leaders in the industry that I met in the early nineteen nineties, by the way, Alex. He he took us down to the Bahamas where he didn't have pay any taxes. And you'd move he sold Templeton funds to Franklin. I guess two names that now living in famous status forever. Now. It's Franklin Templeton good manager great manager. But the other the other great manager John Bogel passing away at eighty nine. He was really a commotion. And a little bit tight there. He was proud that. He wasn't a billionaire even the vanguard manages five trillion now. Yeah. And so we use vanguard when it when it when it's the best choice, then we'll be there. Right. But anyway, Burton Malcolm was his partner. I heard Burton Malki, I'll speak and. He he said, well, I'd like to say, oh, my money is in the S and P five hundred index, but I'm going to confess to you. And he actually piled into emerging markets before a big old route just saying even being an index guy. It's hard to get it sometimes hard to get it. Right. But anyway. The index funds. So it led revolution. Because when I started people had to pay extrordinary costs right transaction based industry, and they were still delivering certificates. When I started. That's that makes me old and you had to post your book every day for your trade. You had to post it by hand. And you weren't supposed to delegate that to an assistant. So anyway, they've since loosened the rules now that we have computers, but so cost keeps coming down because the technology that we. Yeah. When went to the word and certification one thing they pointed out as bond managers high yield bond managers actually add value above the index consistently. So the debate is still raging sometimes it's better to index and sometimes it's better not to to not to. And anyway, he led a revolution in the eighties and nineties, you know, it was like relentless like the -delity now. Fidelity had this campaign. Basically, it gets bad brokers who charged too much commission, and they were right, right? And now fidelity leads the way for the registered investment advisor revolution. Right. There you go. Yeah. No transaction costs and blow management little management cost. And we're paying our management fees eight times over with our current cash flow just to let you know. I mean, if you get it in cash that that may have to sell stuff. Yeah. Okay. This is good. So that was a, sir. John award a transforming figure in the industry. Benchmarking came from that. And we certainly use that here. Mcgowan group asset management now. Bozo award we got one bozo. Award this week. Edward lampert. And what does the little company called Sears holdings, which owns Sears KMart filed for bankruptcy protection this week? A few years ago stock hit a peak of one hundred and twenty one dollars per share this week trading at seventy seven cents. From one hundred twenty one and this came from the dean he nominated Eddie Lampert for bozo award. Now, we couldn't find the returns of his hedge fund. ESL? He's he's had a hedge fund for for many, many years and only manages for a few select families. Yep. Highly concentrates is positions. Lands his other big position. So he's like pretty much all retail. Yeah. Yeah. He must. He must hate peso's at Amazon, he must hate that guy. So. The book value of the company the negative thirty six dollars a share that sounds attract. Now, it also points out that burning two billion a year that's eighteen dollars per share per year. This Bobby dean does his lead does his homework. Yeah. This is not a recommendation for your portfolio right hand. He'd Eddie Lampert. Just bought is buying a company out of bankruptcy in bankruptcy court. So you did have an agreement that if he was bitter in bankruptcy, should it? Go bankrupt. That he gets to be the one that owns assets. Okay. So one of the one of the big, thanks stocks. I have some to point out. So Sears Sears is burn in two billion dollars a year. Okay. Right. Who else had burned two billion dollars a year? That's that's a thing. I don't know you tell me net flicks. Yeah. The burning over that. Anyway, just in great content just saying so his top three holdings are retail auto nation. Lands in Sears holdings, highly should make billions our nation highly cyclical. Okay. Drum roll, please. It is time for the research up. Do it. Okay. So each week will highlight research if you wanna be on the subscription lists. You'll automatically get twice a month. The best research from a team of ten now that Harrison Smith is joined us enjoys Chang, and we will scour the universe for the research that actually does good at making affective decisions alliance. Bernstein context is the title here bond strategies that balance interest rate and credit risks. And he talks about the the balance between traditional bond strategies and high yield very good. So it it it's there. It's there on the website at NetWorth radio dot com. Better yet on the free subscription lists to one four seven to forty four hundred and we will make sure that you get your update, including if there's fast breaking news in the markets. What we're doing about it? That sometimes helps to know. Hey, those guys with thirty years experience doing. Okay. Little trouble in Mexico. Okay. I mean, Mexico it it's a bigger mess than we thought. So tell us tell us the big story is in Mexico this week. So the headline is that El Chapo is. Pretty famous drug trafficker bribe, the former Mexican president with a hundred million dollars so opinion and taking office. That's the wow president-elect yet to. Explains part of the mess right where he wanted to hundred and fifty million in and they they negotiated. Wow. Hopefully, they didn't do it by like Email that got hacked. Okay. Okay. Superior returns. We'll get to that. Right. Superior returns. And then little 4._0._1._K note. Working on an allocation strategy for guy with some legacy accounts where you can only use the mutual fund choices. Let's cover that. And then we'll cover a huge uncoordinated investment for this past year. Alpha. Okay. So if you've got a 4._0._1._K, you got to decide what am I going to how am I going to allocate that thing, right? And the target funds. We've found don't really have much relation to what the target date is. Correct. He's just like half stocks bonds. And if you retire we'll so what if the stocks are down, right, which most people are not comforted by you know, if they if they got a target return for twenty twenty because you're gonna retire. Probably not the right allocation, the twenty twenty-five because it may just be half index stocks and half index bonds and stocks go down then. Well, here's your target. Here's less money, or here's less income than you were anticipating so. What you want to go through to recommendations here. An annual at least process where we look at all the choices in the 4._0._1._K look at where you are where you wanna be. And then we choose the best choices based upon current markets. Right. Along with where you want to be the other processes, the direct rollover conference call if you've got a 4._0._1._K or you've got a lump sum pension, which are huge huge because interest rates are still low long-term. If we look at the equivalent of takes fourteen fifteen years to collect as much money as your lump sum when you could be making interest. In the meantime. Anyway, we do that analysis customized to each sometimes the pensions better sometimes rollovers better, but the direct rollover conference. Call a vital part of the process to ensure that it's done in harmony with your CPA, and you and Andrew you told me last week. You guys are equally as good at doing director rollover conference calls. Yeah. We're gonna make a equally as good conference collar out of Harrison as well. Okay. So what is what is one of the top performing asset classes over the last few years goes Legos? Yeah. You buy your little LEGO barred for four bucks at the store, and you put it in your garage, or you're safe or whatever safe-keeping, and then several years later, you sell it for thirty bucks. I just it just doesn't feel like a reliable income strategy, Alex. Six hundred and thirteen percent game four year period. I wonder how many boxes? The Darth raven had anyway. Okay. So LEGO trader makes Bloomberg news this week. All right. We'll leave it at that that worth radio bringing you the best and financial news special. Thanks to Alex toluene Harrison Smith, Steven Norris and Andrew or the or Nater standing by to help you prepare.