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Lessons Learned From Prince’s Untimely Death

I gave my thoughts to Kiplinger’s Stacy Rapacon on lessons we can learn from the unfortunate passing of Prince. The music legend apparently passed away without a proper estate plan. Or if he had an estate plan, no one knows where it is… which is just as bad. See below:

Keep a copy of your will somewhere handy and be sure to tell your family—or at least your lawyer—where it is. All the estate planning in the world is for naught if your loved ones don’t know where the documents are. In Prince’s case, he was unmarried and had no surviving children, so at least in this case there are no grieving widows and orphans to worry about. But chances are that Prince intended his multi-million-dollar fortune to go, if not to a friend or friends, then to a charity. His wishes may never be carried out if his will cannot be found.

I’ve told my wife repeatedly where to look for the documents in the event I meet an untimely end. But I also know good and well that, if that day came, she might not be mentally able to deal with it at first. So, I keep one of the estate lawyer’s business cards pinned to the bulletin board in our kitchen. Yes, it’s a little morbid, but at least the number is there to call if she needs it. The estate lawyer has copies of all of our documents in the event that the originals are lost or destroyed.

You can read the full article here.

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Will Oculus Propel Facebook Higher?


I gave my thoughts to InvestorPlace’s Kyle Woodley for a piece he wrote on Facebook’s (FB) Oculus. Here’s an excerpt:

Charles Sizemore, portfolio manager on Covestor and chief investment officer at Sizemore Capital Management, a registered investment advisor in Dallas, is among those who think virtual reality will stall again.

“Gamers might embrace it, but I don’t see a lot of people watching movies on their couch wearing a face mask,” he says. “A lot of the consumer innovations of recent years — 3D television, curved screens, etc. — have failed to make much of a splash. I expect this to be mostly a niche product.”

But even if Oculus does sink, don’t count Facebook out as dead money.

Facebook is great, goggles or not. Facebook is sitting near its all-time high following a 40 percent run over the past year, and has expanded its reach to more than 1 billion people on a hunk of rock that has just 3.3 billion Internet users. How much more can we expect Facebook to grow?

Even a true Oculus bear thinks Facebook is chock full of upside.

“Facebook is the lone standout success story in social media,” Sizemore says. “None of the other social media platforms have managed to monetize their user base like Facebook has. And the closest thing Facebook has to a true rival — Twitter (TWTR) — is still something of a niche player. Given that Facebook is only starting to find ways to monetize Instagram, the company should have a lot of healthy growth in front of it.”

You can view the full article here.

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Terrorism and Your Portfolio

I gave my thoughts to Kyle Woodley for a piece he wrote for US News and World Reports: 5 Ways Terrorism Affects Your Portfolio. Here is an excerpt:

Terrorist attacks like the one in Brussels leave too much in their wake – fatalities and injuries, destruction, fear among the populace and many unanswered questions.

But one thing they rarely seem to leave anymore is a lasting effect on stocks.

“Most terror attacks – and particularly those on foreign soil – have only a passing effect on the markets,” says Charles Sizemore, a portfolio manager on Covestor and chief investment officer at Sizemore Capital Management, a registered investment advisor in Dallas. “Most U.S. investors are barely aware that anything happened, and economic effects here tend to be negligible.

“While terrorism is devastating to the people that experience it firsthand, it’s exceptionally rare for an attack to have a big enough impact on investor sentiment or economic activity to really change a market’s trend,” he says.

You can read the full article here.

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Chipotle is an Orphan Stock


I gave my thoughts to on Chipotle (CMG) to Kyle Woodley for a story he wrote for US News and World Reports. Chipotle is a great company and one of the great growth stories of the past decade. But unfortunately, the stock is something of an orphan right now:

“This is the issue with Chipotle today: It’s a stock without a buying clientele,” says Charles Sizemore, founder of Sizemore Capital Management, a fee-based registered investment advisory firm based in Dallas. “It was a high-flying momentum stock that has now lost its momentum.”

Chipotle was a hot mover for years prior to 2015’s nosedive. Shares more than tripled from their October 2012 lows in the mid-$200s through its all-time high of $758.61 in August 2015. That included a rapid move of about 25 percent that drove CMG to its peak in about six weeks.

However, a decline of roughly 35 percent hasn’t exactly been followed by a lot of dip-buying…

Before Tuesday’s report, CMG was trading at 28 times trailing earnings and 37 times forward earnings. “And while those numbers aren’t off the charts for a restaurant stock,” Sizemore says, “Chipotle doesn’t follow a franchise model. A franchise model is generally more profitable in terms of return on equity and commands a higher earnings multiple. Chipotle manages its own stores and has no plans to franchise.”

That leaves CMG in a precarious position. Sizemore says Chipotle’s lost momentum means “trend followers probably won’t return to it. But it isn’t cheap enough yet to attract value investors. So it’s something of an orphan right now.”

You can read the full article here.

Photo credit: Mike Mozart

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All About Fees…

I gave Jeff Reeves my thoughts on fees and the impact they can have on your portfolio. You can read Jeff’s USA Today piece here. And the following is an excerpt:

The thing to remember, Sizemore adds, is that you don’t get a bill for mutual fund fees; they are “baked in” to your investment’s performance. For instance, if that same mutual fund charging 0.7% each year generates a 10% annual return, it passes 9.3% in gains on to you and takes 0.7% off the top.

Furthermore, “returns lost to fees actually compound over time,” he said, since you lose not just that fixed fee up front but also potential investment returns that could have been made on that extra cash.

Given all this, it’s crucial for investors to keep an eye on what they are paying and try to keep costs as low as possible…

“A fee number in a vacuum really doesn’t tell you much. If you’re investing in a strategy that really is different and really adds something to your portfolio, then paying a higher fee shouldn’t be a deal breaker,” he said. A few investment areas that tend to be more sophisticated and charge higher management fees include emerging market investments or unconstrained bond funds, Sizemore said. However, he adds that “If you’re getting a fund that tracks pretty closely to the S&P 500, then it’s hard to justify paying a premium.”…

“When presented with many different ways to do the same thing, always err on the side of lower costs,” Sizemore said.

You can read the full article here.

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