| THERE'S SOMETHING TO BE SAID FOR standing | | | | seen sizeable profits result for our readers. |
| firm in the face of opposition. Interestingly, most of | | | | Recently, a few financial managers have decided to |
| the best stock decisions have come at times when | | | | take a position on Harley-Davidson stock that differs |
| the mainstream is saying precisely the opposite. | | | | from most of the investment community. While |
| Predictions like these can be valuable if one is to build | | | | Harley's quarterly earnings were indeed below |
| an investment strategy around their view of the | | | | expectations, the minority rejects the investment |
| world. | | | | community's hysterical suggestion that this is the end |
| The appraisal by the minority over the past few | | | | for the motorcycle maker. In fact, they firmly believe |
| years that inflation would return (while most of Wall | | | | this will turn out to be a small blip in the longterm |
| Street was bemoaning DEflation) has proven to be | | | | upward trend. |
| true. As we've pointed out in the past, it can be | | | | It is decisions like these that set these advisors apart |
| readily observed in oil prices, real estate, and dozens | | | | from much of the investment world. It seems that |
| of other commodities where no source of cheap | | | | many of the writers in "investment-land" are content |
| imports is available. | | | | to parrot the projections of corporate lackeys and |
| As Steve Forbes remarks in Forbes Magazine's May | | | | government bureaucrats, without so much as a |
| 23rd commentary, "oil became expensive because | | | | scintilla of independent analysis. Alas, as the demand |
| the Fed has been printing too much money." In an | | | | for investment advice has grown, it may have |
| earlier article, I mentioned that what we're really | | | | outstripped the supply of quality analysts, both in |
| seeing is just the effect of a falling dollar, rather than | | | | news reporting and in the investment industry itself. |
| rising oil prices. | | | | This would explain the quantity of drivel coming from |
| Some might wonder how we think of the dollar as a | | | | multiple sources these days. |
| falling currency, because it certainly seems to have | | | | We can occasionally find kindred spirits in the media: |
| been rising against the Euro in recent months. Still, it | | | | while it is invariably best to disagree with Business |
| may be more accurate to think of the Euro as simply | | | | Week, Fortune, and most of the TV business |
| falling faster than the dollar. Indeed, now that both | | | | news-trivia reporters, a few - like Forbes, Barron's, or |
| France and the Netherlands have voted to reject the | | | | TV's Louis Rukeyser or Paul Kangas - still provide |
| EU Constitution, the entire structure of the EU may | | | | thoughtful commentary from time to time. Overall, |
| be called into question, and while we don't foresee | | | | though, the U.S seems to have reached a distressing |
| the collapse of that institution, we do believe it will | | | | time in investment reporting. |
| weigh on the currency for a time. As we have said in | | | | Most reporters and publications are content to simply |
| the past, the attempt at unification is itself no more | | | | repeat what they've heard, play on emotions, and call |
| than a grand experiment, and the currency that | | | | it complete coverage. I suppose it makes sense that |
| accompanies it can be viewed as no more stable | | | | eventually coverage of business news would descend |
| than the underlying structure. | | | | to the same level as broader news coverage. |
| Still, none of this makes us view the dollar as | | | | In times like these, it is important to select a few |
| necessarily strong. In a world where the Indian | | | | good sources of quality information. It is just as |
| Rupee, Romanian Leu, South African Rand and other | | | | important to wean ourselves from poor information |
| historically undependable currencies are rising steadily | | | | sources. If your newspaper, magazine, or broadcast |
| against the dollar, its silly to think of our currency as | | | | station has ceased offering thoughtful analysis, stop |
| anything but weak. | | | | wasting your valuable time. Utilize your time more |
| In real estate, many suggested in the past that a real | | | | productively on the few meaningful sources of |
| estate bubble may be developing, but also that much | | | | information. |
| of the rise in prices may be coming from inflation as | | | | In light of so much fluff in the media, it is increasingly |
| well. Indeed, if any price collapse does occur, it may | | | | important to stand apart from the mainstream. You |
| be some time from now, and some regions may | | | | need information resources that are willing to do so, |
| hardly feel it. The gap in price between the large | | | | as well. Contrarians (investors who have bucked the |
| California cities and mainstream America is reportedly | | | | trends) have fared well in the investing quandary. |
| wider than ever before. It's best to use caution in | | | | Today, contrarians' biggest advantage is that they |
| the red-hot markets in Cali, NY, and Mass., but the | | | | are willing to stand out and avoid falling for the latest |
| rest of the country seems fairly priced. One should | | | | hype. Mindless followers, in an age of meaningless |
| not be too worried about prices that have risen no | | | | information, will eventually get slaughtered by |
| faster than the price of oil. While others have | | | | following mediocre advice once too often. Don't |
| predicted (endlessly, it seems) that homebuilders | | | | tolerate lackluster information resources. Seek out |
| ought to fall apart any day now, a few have | | | | quality. |
| continued to recommend some of the best ones and | | | | |