The Market’s Response To Crisis

The most important thing long-term investors need to see today is the market’s response to crisis, courtesy of Dimensional Funds. The chart above should put the Brexit in perspective. Nobody knows yet what the implications will be, but I’m pretty confident that this is no more significant than any of the six events above. Now…

Simplexity

Nick Murray once said “if you want to suppress volatility, you will suppress returns.” This definitely applies to many investors who either try to time the market on their own, or turn to complex and often times dangerous strategies designed to deliver stock like returns with bond like risk. Such a strategy by definition, cannot…

Going Out On Top

Warren Buffett began his investment partnership in 1957 at 25 years old. He started with $105,100 and seven limited partners; his mother, sister, aunt, father-in-law, brother-in-law, college roommate and lawyer. He charged no management fee, took 25% percent of any gains beyond a cumulative 6%, and agreed to personally absorb a percentage of any losses….

History Gets Lost In The Charts

Benjamin Roth began writing a diary in 1931 that detailed his experience during The Great Depression. He would continue documenting his life- 14 handwritten notebooks- until he died in 1978. Roth does an amazing job capturing the psychology of the time, which completely gets lost in a chart. Looking at the Dow to experience The…

Never Ready

“If you want to make God laugh, tell him about your plans.”- Woody Allen My mother passed away five years ago today. At just 56 years old, she was robbed of her future. I wasn’t ready for her to go. But today I’m reminded that we are creatures of survival, that healing is in every fiber of…

Historical Returns Versus Investor Returns

The 1950s were a great time to be an investor. It was the only decade where stocks began at the lows and finished right near the highs. Furthermore, the total return on the S&P 500 was 486%, the strongest of any decade ever. But when looking at historical returns, we fail to see what really…

The Economy ≠ The Stock Market

For the first time ever (going back to 1948), U.S. GDP has failed to grow at least 5% following a recession. And although everyone would prefer higher growth, the encouraging news for investors is that changes in GDP have little do with stock market returns. This surprises most people, but when you think about what…

Triple Threat

George Soros, one of the most successful investors of all time, just came out of retirement to bet against the U.S. stock market. Carl Icahn is 150% net short. Stanley Druckenmiller is in the same boat. Yikes, you wouldn’t want to be on the other side from one of these guys, let alone all three of them. There…

For Your Reading Pleasure

There was some great reads out there today, here were my favorites. Not many people are worthy of “classic” in front of their name, but this is classic Housel (@tmfhousel) Pandering to the lowest common economic denominators (@ateachmoment) James Osborne on the trends in mutual funds and ETFs (@basonasset) What a time to be a…

The Iron Rules

“It is an iron rule of history that what looks inevitable in hindsight was far from obvious at the time.” -Yuval Nah Harari Imagine watching The Sixth Sense for the first time. Only you start at the final scene, and then continue on to the beginning. This is sort of what it’s like reading and…