Robert Rodriguez Weathers the Stock Market Written by Dr. Charlie Tian
Robert Rodriguez likes to buy stocks at their lows. When there are not enough stocks hitting new lows, he closes his fund and piles up cash. This is what he has been doing lately. His moves deserve attention for good reasons, his $1.7 billion FPA Capital Fund has averaged an annual total return of more than 17% over last 20 years, net of sales charge, handily beating all benchmarks by wide margins. As Robert Rodriguez finds slim pickings in stock market, his goal has changed to capital preservation. The cash position in his fund has been in steady increase. On March 31, 2005 , it is at 34%. As a reference, between 1984 and 1997, his cash level was rarely above 5% and most of time it was less than 2%. Now he is sitting on this big trunk of cash, awaiting opportunities. "You never know value of liquidity until you need it and don't have it." He said, “This is one of those times when it takes a great deal of patience, discipline, and conviction to maintain such a contrarian position, because of potential business and investment risk that it entails.” Robert Rodriguez’ contrarian position in investment goes beyond adjusting level of cash. He also reduces his fund’s weighting in sectors or industries that he thinks are overpriced. He has done this before. The years of 1979 –1981 was time of second oil crisis, oil and gas prices were soaring. Many "experts" were forecasting oil prices of $100 per barrel within ten years. Energy stocks were being valued as growth stocks and represented nearly 31% of S&P 500's market capitalization. Robert Rodriguez went to contrary; he liquidated all his energy stocks and bought bonds. The oil mania resulted in large-scale capital destruction with virtually every bank in state of Texas going bankrupt by 1987. Robert Rodriguez’s contrarian investment style was tested again during peak of tech bubble. In March 2000, he analyzed operating and stock market performances of Microsoft and Cisco Systems, made growth assumptions for them and U.S. economy. He biased down expected growth and valuation assumptions for each of these companies. The result was that Microsoft's market valuation would increase to 36% of nominal GDP. Cisco's expected market valuation would rise to 48% of nominal GDP. The combination of these two estimates would equal 84% of GDP by 2010. Apparently (now) odds of this happening were not great. In light of these trends, he reduced his Fund's exposure to technology stocks. We all know how that bubble ended.
| | A good dental insurance policy can make your smile brighterWritten by Raasha tandon
Dental insurance is a type of insurance in which beneficiary and policy provider agree on a plan in which policy provider pays for dental services used. This dental service can be from dentist, dental hygienist or any other person involved in dental health. In exchange for insurance beneficiary has to pay annual premium, co-payment, deductible, etc.Dental insurance is broadly divided into two types based on restrictions for physicians that can be sought, payment method to physicians, etc. these two types are: Fee for service plan and Managed care plan. These types of plans are more or less similar to general health insurance. Fee for service plan: In fee for service plan beneficiary is supposed to pay for services he has taken every time he / she takes those services. The beneficiary can choose any of doctors or health care providers by himself and then submit claim to insurance company. This is further subdivided into reimbursement plans and indemnity plans. In former, you will claim for bills incurred while having services from dental health care provider. This claim will be reimbursed irrespective of type of services sought. In latter, you will be reimbursed based on based on set amount that insurance company gives for specific service. In both of cases it is you who is going to decide who should your doctor be. Managed care plan: In this type of plan insurance company
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