March 2017

Today in Market History

Today in market history, 1999: The Dow Jones Industrial Average closes above 10,000 for the first time ever. pic.twitter.com/wD1P8rjd1K — Ritholtz Wealth (@RitholtzWealth) March 29, 2017 Eighteen years ago today, the Dow Jones Industrial Average closed above 10,000 for the first time ever. But under the surface, some funky things were happening. Here’s Gretchen Morgenson from…

A Picture Says 1.2 Trillion Words

From 2007 through 2015, $835 billion was yanked out of active mutual funds and $1.2 trillion plowed into index funds. Below is the most compelling image I’ve seen to explain why this secular change is taking place. Index funds aren’t perfect, as Ben recently laid out, but assuming you can control your behavior, which is…

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…