Will The Rise of Factors Kill Factor Investors?

A recent WSJ report says that “Revenues at HFT firms from U.S. equities trading were an estimated $1.1 billion last year, down from $7.2 billion in 2009.” That’s an 85% decline in under a decade! When it comes to business and markets in particular, edges don’t last very long. The brilliant mathematician Benoit Mandelbrot said…

These Are The Goods

 It’s funny, I thought my life would change when I had a baby, and it certainly has, but one thing I didn’t count on is how much more time I would have. He sleeps, and he eats. That’s it for now. So I’ve been either home or at the office and I’ve consumed more content in…

Gradual Improvements Go Unnoticed

  When I sat down this morning to create a “Wall of Worry” chart, the hard part wasn’t coming up with the list, but rather choosing what to leave off. Since stocks bottomed in 2009, there have been so many potential reasons to sell that it wasn’t possible to fit them all. Below are a few…

These are the Goods

It’a funny, I thought my life would change when I had a baby, and it certainly has, but one thing I didn’t count on is how much more time I would have. He sleeps, and he eats. That’s it for now. So I’ve been either home or at the office and I’ve consumed more content in…

The Three Types of Contrarians

It seems like everybody wants to be a contrarian these days. Predictably, there were a lot of “Bill Ackman is out of Valeant, that’s your buy signal” comments this week. I want to talk about the three different types of contrarians: those who are early, those who are late, and those that are right. On…

Happy Anniversary!

Today in market history, 2000: The NASDAQ Composite hits its final all-time high. Over the next 31 months it will lose 78% of its value. pic.twitter.com/Kb9wIEZdhl — Ritholtz Wealth (@RitholtzWealth) March 10, 2017 During the Russian financial crisis of 1998, the NASDAQ fell 33% from July through October, but during the final 58 days of…

How Long Will This Bull Market Last?

You’ve probably already heard that this week marks the eighth anniversary of the bull market. Some would argue, myself included, that bull markets don’t start at the depths of a bear, but whatever, let’s just go with it for the purposes of moving past a dead and beaten horse. The United States has only experienced…

What If Earnings Never Collapsed?

The S&P 500 fell 57.69% from October 2007 to March 2009, but real earnings fell even more, from a high of $98.43 in June 2007 to a low of $8.01 in April 2009, a 91.86% decline. Some might think that this historical collapse is inflating the CAPE ratio. In other words, if real earnings didn’t…

Iceberg & Arugula

Adam Smith once said “Show me a portfolio, I’ll tell you the generation.” It’s safe to say if he peeked inside a brokerage account today, he wouldn’t recognize which generation he was in. The story we keep hearing about is the shift from active to passive, and while it’s true that dollars are leaving stock…

Can You Predict Bubbles?

“For bubbles, I want a systematic way of identifying them. It’s a simple proposition. You have to be able to predict that there is some end to it. All the tests people have done trying to do that don’t work. Statistically, people have not come up with ways of identifying bubbles.” – Eugene F. Fama,…