New investment vehicles seek to mimic the master

Add another innovation to the investor’s toolkit. 

Deutsche Bank has issued a set of exchange-traded notes that attempt to duplicate the value-investing prowess of the late Benjamin Graham. 

Graham is known as the father of value investing and he authored the two books "Security Analysis" (with David Dodd) and "The Intelligent Investor," which are both considered must-reads for serious investors. I confess to having read neither, but they’re on my list, I promise. 

One of Graham’s most noteworthy disciples is Wall Street guru Warren Buffet. Graham espoused investing in companies as if one were actually buying into the business. 

For that reason, he recommended buying stock only in companies that had sound, liquid balance sheets and good prospects for profits. 

That’s what the Benjamin Graham Large Cap Value Index Total Return (BVL), Small Cap Value Index Total Return (BSC) and Total Market Value Index Total Return (BVT) ETNs seek to do. 

ETNs are similar to exchange-traded-funds, which are baskets of stocks like mutual funds that trade throughout the day as an individual stock would. However, rather than stock, ETNs invest in debt. For that reason, ETNs are subject to credit market risk, experts say. 

And despite the namesake pillar these new ETNs are built on, some were already questioning the hype factor of the investments before the prospectus ink was even dry. 

"Celebrity branding makes me nervous," Matt Hougan, editor at IndexUniverse.com, told MarketWatch. "How will these things actually perform? Just because I wear Air Jordan [shoes], it doesn't mean I can dunk." 

Time to board airline stocks? 

Sitting around Tampa International Airport at about 12:35 a.m. last Monday after my visiting 12-year-old son's plane from New Jersey had been delayed at least three times, I was thinking about how cruddy, how absolutely horrible air travel and the airline industry has become. 

That thought was solidified with the remark one of two de-planing pilots made to an anxious passenger running back to the gate to retrieve an item he had left behind. 

"It's at the pawn shop already," the empathetic pilot said. "Did you see the look on his face?" the other pilot said as the man rushed down the walkway to the plane. 

Charging for pillows and blankets? Charging for water? 

But despite the industry's woes, some are seeing value in airline stocks. 

Much of that optimism, however, has come from the steep drop in oil prices. No one can say with 100-percent certainly that oil prices will stay down. 

But the move has caused shares of U.S. airlines to rebound in recent weeks. Last week a Morgan Stanley analyst predicted that the sector might return to profitability if oil prices are held in check. 

The Morgan Stanley analyst singled out U.S. Airways (LCC) and United Airlines parent UAL Corp. (UAL) as most likely to benefit from more favorable industry conditions, according to the Wall Street Journal. 

Still, I tend to embrace the advice of "Mad Money" host Jim Cramer, which is to never own an airline stock, under any circumstances. There's just too much uncertainty involved in the industry, regardless of how many pillows and cups of water they can sell.

Brian