STREET DOGS: The value of contrary opinion
Investment advice from Philip Carret after 80 years in the industry, writes Michel Pireu
The contrary opinion school has a great deal of validity. When everyone is bullish, why, you should be very concerned — Phil Carret. Carret started one of the world’s first mutual funds and his investment career spanned eight decades, encompassing dozens of cycles of bull and bear markets. He died in 1998 aged 101. While he built his reputation as a long-term value investor, Carret also made speculative bets, trading for short-term gains. In 1939 he bought shares of a Cuban sugar company, expecting that the price of sugar would soar during wartime. He sold the shares, purchased for $1.75 each, for $65 to $200 apiece in the 1940s. Carret had 12 basic "Commandments of Investing": 1. Never hold fewer than 10 different securities covering five different fields of business; 2. At least once every six months, reappraise every security held; 3. Keep at least half the total fund in income-producing securities; 4. Consider (dividend) yield the least important factor in analysing any stock; 5...
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