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My favourite information sources – Part 3

Investors need to keep up with the financial news which may affect their investments. With the internet, it is now very easy to get breaking news, literally seconds after it happens on the many free finance news portals. My favourite international news portal would be Bloomberg. I normally check the Bloomberg headlines and key US market indexes on Kingsley’s iphone as I wait for him to make me the best cup of coffee each morning.  I also like Yahoo Finance and CNBC especially for the interviews they conduct with top market analysts, investors and fund managers. Many of the people whose opinions I value, like banking analyst Meredith Whitney and hedge fund manager Jim Chanos are regular guests on CNBC’s Squawk Box. Market forecaster Robert Prechter and investment adviser Gary Shilling are frequent guests on Yahoo Finance’s Tech Ticker. The international news headlines will give you a good feel of what is important to global investors and it always interesting to see how they view Australia. In a recent interview with Gary Shilling, he sees Australia as a colony of China. As both he and Jim Chanos are bearish on China, they are shorting Australian mining stocks and the Australian dollar as a proxy for playing China as foreign investors cannot easily get access to the Chinese stockmarket. I don’t know about you but I would feel pretty nervous about holding the same mining stocks that I know savvy global hedge fund managers are shorting!

The two Australian news portals I use are The Age’s BusinessDay for news and The Business Spectator for both news and market commentary. From some of my earlier blog posts, you would have gathered that I don’t normally agree with a lot of the market commentary published on BusinessDay, especially when they come from people who work for brokerages or retail equity funds as the organisations they work for have a vested interest to get you to buy shares. I prefer to get the views of independent analysts like the KGB (Kohler, Gottliebsen and Bartholomeusz) who provide the main market commentaries on The Business Spectator. Although I have classified them as a local news portal, they do cover global news as well but focus mainly on news that would be of interest to the Australian investor. If I had limited time to keep up with the financial markets, I think I would just look at the headlines on The Business Spectator as it seems like a good information funnel for an Australian investor.

Well, this concludes I have to say about my favourite sources of fundamental information. There many good financial sites on the internet but we don’t want to waste too much time reading the financial news. It is easy to get caught up with reading just for entertainment value. For example, even though I don’t own a single share in David Jones, I recently found myself spending too much time reading articles about Mark McInnes’s “shocking resignation” as their CEO. Over time you will find your own set of favourite columnists whose views you respect and it usually suffice to read what they write rather than read every single article that is published on the latest “hot topic”.

Some of you may be surprised that I have not mentioned anything about the most famous fundamental investor of all – Warren Buffet. Some people are even willing to pay AUD3 million to have lunch with Warren Buffet so how could I have excluded him? We have many Buffet investment books on our book shelf at home but since the global financial crisis I have been more interested in the views of people who correctly predicted the crisis and sadly, Warren Buffet was not one of them. In early 2007, he was one of the people who said the subprime crisis will not have much of an impact on the US economy. He is also not the “value investor that buys wonderful businesses when the price is right” that most people believe him to be as he does a lot of the same things that hedge fund managers do to make money like buying distressed assets and selling derivatives. In recent times he is more well known for his close association with the “too big to fail” bank Goldman Sachs and ratings agency Moody who are both currently under investigation by the SEC for the role they played in causing the global financial crisis. Many retail investors aspire to invest like Warren Buffett but the reality is we cannot do what he does. I like what Marcus Padley recently said “The concept that Buffett can be emulated has cost investors more than it has ever made them. No one has ever managed to replicate his performance. The idea that you can is the biggest drawcard the equity market has and it is a lie. We all keep buying the dream.”

In Part 4, I will start on my favourite sources for non-fundamental information.

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