To the outside world, Curt Degerman was a poor can collector.

The aged Swede, known as “Tin Can Curt,” spent 30 years roaming the streets of Skelleftea in northern Sweden in his blue jacket and ragged pants, collecting tin cans and bottle for cash. He was, in the eyes of most people, an ordinary street bum.

Yet when he died he left more than $1.4 million to his cousin.

How did he do it? Thrift and smart investing.

It turns out that in between collecting cans, Mr. Degerman spent a lot of time in the local library reading business papers and studying the stock market.

“He knew stocks inside and out,” said his cousin.

He used his tin-can earnings to buy mutual funds. He also bought 124 gold bars and also grew his cash with a savings account.

Amazing.  Mr. Degerman passed away at only age 60, yet managed to amass $1.4 million.  Imagine if he had lived another ten or twenty years (like Warren Buffett), or had another bull market to help his compounding rate!

Advisors have to deal with investors that have undersaved all the time—and yet still hope to retire with their working income.  I’m sure Mr. Degerman followed classic principles: 1) keep your expenses down, 2) live beneath your means, 3) save like crazy, and 4) invest for growth and let compounding work its magic.  If Tin Can Curt can do it, so can you.

…in Florida’s Palm Beach County alone, Bank of America has sued itself for foreclosure 11 times since late March, according to foreclosure fraud activist Lynn Szymoniak, who forwarded one such foreclosure filing, dated March 29, 2012, to The Huffington Post.

In the March 29 filing, Bank of America is seeking to foreclose on a condominium and names the condo owner and Bank of America as defendants in the suit. The company is literally seeking damages from itself in order to foreclose on the condo owner.

Banks have been caught suing themselves before. In 2009, Dow Jones columnist Al Lewis uncovered a case in which Wells Fargo had sued itself in connection with a foreclosure in Florida’s Hillsborough County. The bank owned both the first and second liens on the property  and ended up hiring two separate attorneys to deal with the snafu — one to bring the lawsuit and another to defend itself.

Now I really have seen everything.

This gem is from a longer piece about making sense of the market, but it crystallizes the rationale behind a systematic casting-out process in a relative strength portfolio.  Hold winners, cut losers.

HT: Abnormal Returns

Mr. Montier is on the asset allocation team at GMO and was writing about analysts’ extrapolations for future profit margins, but I think his words may have more general application.  In truth, we have no better ability to forecast, which is why our investment work relies on the systematic application of relative strength.  Prices are usually more accurate than the consensus forecast.

The empirical findings of this study suggest that there is a strong statistical significant positive contemporaneous relationship between the inflows and outflows in the precious metals ETPs and the returns of the underlying metals.

Who knew?  Supply and demand causes the prices of precious metals to go up and down.  Duh.

I am always amazed when academics “discover” what practitioners have known for generations.  Academia does generate some real insights in finance, but this does not seem to be one of them.

Since 2001 Irene has been named every year to RBC Wealth Management’s President’s Council for her outstanding performance and record of superior client service.

Again, we appreciate everyone who participated in the surveys, especially those who keep coming back week after week.  We are approaching our two-year anniversary next week, so look for some more detailed posts in the coming weeks.

Thanks again!

Source: The Big Picture/Saturday Morning Breakfast Cereal

This is a good reminder that any transactions you make are inextricably linked with time.  While there is no way to ever know where the exact top or exact bottom is, there are plenty of diffusion indexes that can usefully identify oversold markets that present good buying opportunities.  (For one example, see here.)  You might as well try to be intelligent about your purchase decisions.

HT: Tom McClellan, Bollinger Markets List

1. Abandon all humility.
2. Create a straw man.
3. Invent a secret method.
4. Communicate.
5. Brag.
6. Ignore all criticism.

Obviously we’re doing it wrong!