The Dow Jones Industrial Average broke 13,000 earlier this week. Cold comfort for the fact that U.S. stocks have disappointed for more than a decade. Consider: the Dow, while now having doubled off its financial-crisis low, remains well off its year-2007 high of 14,165 … the 2000s went on to see the stock market have its worst decade since the Depression, capped off by an outright collapse in 2008 and the Dow visiting 1996 levels in the spring of 2009. Scores of investors vowed “never again,” and have since ignored stacks of brokerage statements and forgot their E*Trade log-ins.

 But now … “Conditions are almost ideal for equity investors relative to all other investments,” Keith Wirtz, who oversees $14.6 billion as chief investment officer for Fifth Third Asset Management in Cincinnati, said in a Feb. 14 telephone interview. “The Fed’s keeping rates low for the foreseeable future to try to stimulate the environment for employee hiring and business activity. What does that mean for capital markets? Savers are not being rewarded.”

 Could the confluence of Dow 13,000 and puny alternatives elsewhere finally bring investors back to the market? After all, since the end of 2008, $10,000 would have earned $184.60 in interest, based on the average monthly savings rate compiled by Bankrate.com. For Treasuries, the return was $1,644.

 Meanwhile, U.S. stocks, quietly and with anything but fanfare, produced a total gain, dividends included, of $5,690.

 From an article by Roben Farzad at Bloomberg Business Week

“I’ve been doing this for 15 years and I’ve never seen as many people give up as in the last three months,” says Luke Ellis of Man Group, a large listed fund. This trend is distinct from the round of closures in 2008. Then, managers were hit by investors’ redemptions and had no choice but to close; today many are electing to walk away.”

This is in part because many hedge funds are well below their high watermarks, meaning that they can only charge investors management fees, which at around two per cent is only enough cookie money for a year or two unless one is a ginormous fund. According to Credit Suisse data cited by the Economist, 67 per cent of hedge funds were below their watermarks at the end of 2011.

ft.com/Alphaville posted by Lisa Pollack

 From Chartoftheday.com

The media keeps telling me that there are bears out there. I don’t see any. I just keep seeing the same guys telling me to buy large cap industrials. These are the same guys that told me to buy large cap industrials in 2008. The song remains the same and the analysts stay the same. They never met a stock they didn’t love and the market will just do what it always does. The market exists and confounds us all.  I am bullish, but I do have some bearish DNA, and I am wondering as much as the next guy when this thing corrects a little. You don’t have to be a perma bear or a perma bull to realize that nothing goes straight up or down.

But what if we just don’t “really” go down? What if corrections are just sideways moves and/or very very shallow pullbacks that are just buying opportunities?

Europe couldn’t kill this thing and it had every chance. I could easily make a case for a 10% correction, I could just as easily make a case right now for a big  move up without any meaningful interruptions. No I’m not licking LSD laced postage stamps. I’m just thinking out loud.

It may just be this psychological tug and pull that continues to walk this thing higher. Will we pull back? Of course we will. Will it feel apocalyptic when it does? I doubt it.

The upside trader at Stocktwits

The bottom line on striving for superior performance has a lot to do with daring to be great … One of the investor’s first and most fundamental decisions has to be on the question of how far out the portfolio will venture. How much emphasis should be put on diversifying, avoiding loss and ensuring against below–pack performance, and how much on sacrificing these things in the hope of doing better?

I learned a lot from my favourite fortune cookie: The cautious seldom err or write great poetry.  It cuts two ways, which makes it thought provoking. Caution can help us avoid mistakes, but it can also keep us from great accomplishments.

Personally, I like caution in my money managers. I believe that in many cases, the avoidance of losses and terrible years is more easily achieved than repeated greatness, and thus risk control is more likely to create a solid foundation for a superior long-term track record. Investing scared, requiring good value and a substantial margin of error, and being conscious of what you don’t know and can’t control are hallmarks of the best investors I know.

Howard Marks – Dare to be Great

Every experience you have ever had is over. Every thought you’ve ever had, started and finished. Every emotion and mood you’ve experienced has been replaced by another. You’ve been happy, sad, jealous, depressed, angry, in love, shamed, proud, and every other conceivable human feeling. Where did they all go? The answer is, no one really knows. All we know is that, eventually, everything disappears into nothingness. Welcoming this truth into your life is the beginning of a liberating adventure.

 From Don’t sweat the small stuff…and it’s all small stuff by Richard Carlson

To suppose that the value of a common stock is determined purely by a corporation’s earnings discounted by the relevant interest rate and adjusted for the marginal tax rate is to forget that people have burned witches, gone to war on a whim, risen to the defence of Joseph Stalin, and believed Orson Welles when he told them over the radio that the Martians have landed. Investors are prone to be bullish at the top of the market when prices are high and bearish at the bottom when prices are low. Like war, speculation is a social activity. It is carried out by groups.

James Grant, editor of Grant’s Interest Rate Observer.

With great hope in the private place where we make our trading decisions, our current idea is made ready … one difficulty in selling is the attachment experienced toward the position. After all, once something is ours, we naturally tend to become attached to it … This attachment to the things we buy has been called the “endowment effect” by psychologists and economists and we all recognise it in our financial transactions as well as in our inability to part with that old sports jacket hanging in the closet.

The speculator is the parent of the idea … the position takes on meaning as a personal extension of self … Another reason that Johnny does not sell, even when the position may be losing ground, is because he wants to dream … For many, at the moment of purchase critical judgment weakens and hope ascends to govern the decision process.

Roy Shapiro – New York psychologist

The real trouble with this world of ours is not that it is an unreasonable world, nor even that it is a reasonable one. The commonest kind of trouble is that it is nearly reasonable but not quite. Life is not an illogicality; yet it is a trap for logicians. It looks just a little bit more mathematical and regular than it is; its exactitude is obvious, but its inexactitude is hidden; its wildness lies in wait.

- GK Chesterton.

CNBC’s Best Alternative Financial Blogs :

1. DealBreaker

2. Business Insider

3. Zero Hedge

4. The Money Illusion

5. Mish’s Global Economic Trend Analysis

6. Credit Writedowns

 7. Of Two Minds

8. Naked Capitalism

9. The Big Picture

 10. Calculated Risk

11. The Reformed Broker

12. The Epicurean Dealmaker

13. Pragmatic Capitalism

14. Economonitor’s Edward Hugh

15. Ludwig von Mises Institute

16. Minyanville

17. TheMoneyIllusion

18. Abnormal Returns

19. Distressed Debt Investing

From John Carney at NetNet