For nearly 50 years>, the Sports Illustrated swimsuit issue has featured pretty girls in skimpy bikinis frolicking in the sun and sand from an exotic local. David Letterman will unveil this year s cover on tonight s Late Show. Don t be surprised to see a repeat of the same winning formula: a beautiful girl in tiny attire, just as it s been since 1964.
Much the same repetition occurs in the market, where there's always a new company, ETF, or technique to attract your investment dollar. From volatility to spot foreign exchange, we often profile new options and ideas in which to try and make a buck.
And while there will always be a pretty new stock pick to squire, the real wealth is built from the longer term financial relationships that persist over time.
That has been the case with Nippon Telegraph & Telephone, the dominant Japanese telephone carrier and second largest telecommunications company in Asia which I wrotefollow me here.
Shares have climbed even amid the recent market decline, up about 12% not including dividends since profiled last June. And while I'm gratified for any profit, I'm admittedly frustrated that 2009's massive rally left so many value-oriented names like NTT behind. Clients and colleagues have taunted me with their meaty gains in stocks like Ford and Citigroup that had been tossed aside during 2008 s collapse.
You Make the Call
Nippon Telegraph & Telephone Corp. (NTT) -- 6 months>
Yet here I sit with a position in NTT, now eclipsing highs not seen since October, strength for which I have no real explanation. The company recently reported net profit that was down year-over-year, yet the stock climbed. While Japan has outperformed the U.S. year-to-date, it's not a demonstrable investment story or huge gainer yet.
To borrow a line from Tom Petty, the waiting is often the hardest part. Because while there are a multitude of other investment ideas that most certainly interest me for new money, once you take a position, it s all up to the market. So even though I m thoroughly bored with NTT, the fact is that it s a winning trade knocking up against new multimonth highs. That alone is reason enough to hang on.
My suspicion is that there s a fundamental change in corporate organization afoot, a rumor fanned by comments from the incoming Minister of Internal Affairs that prompted a spike in shares last fall. The Japanese government owns about 33% of the company, having last sold shares in 2001. My conjecture as to why the price has risen, however, is secondary to the only data point that matters: the stock itself.
There will always be a promising new filly on which to take a flier. But just as was the case with Sony, another laggard which ultimately rallied sharply to new multimonth highs, the oft-overlooked component of any relationship is the patience to sit on a market that is confirming your outlook, even if at a slower rate than you had hoped. I still expect great things.
At the Close: The Command Economy
President Barack Obama, Senate Democratic Policy Issues Conference
That s precisely the concern: a government which sees its role not as protecting free markets and individual rights, but pulling levers and pushing buttons in order to achieve an intended goal. While I have great respect for the president, the suggestion that wealth is created by a centralized plan in Washington, regardless of how clever the planners, is antithetical to the tradition of free enterprise that s fundamental to the American way of life.
At the time of writing, Hoenig s fund owned shares of many of the securities mentioned.