June 2017

This is Your Nightmare Scenario

What would happen if stocks crash? What would that do to people’s retirement plans? How would that change the way young people think about stocks? And what would it do to our country? The cyclically adjusted price-to-earnings ratio now reads 30 for just the third time ever. The two previous times it printed a three…

These Are the Goods

Articles This may be the first bull market in history that featured layoffs on Wall Street. By Josh Brown Once you have hit an all time high, the very next month you are likely to hit another all time high. By of Dollars and Data Why pessimism can be hard to distinguish from critical thinking…

Allocator Beware

Investors have little appetite for human portfolio managers these days. In the first quarter of 2017, $4.6 billion of new money was invested in quant funds, while $10 billion was withdrawn from non-quant funds, according to the Wall Street Journal. It’s been well documented that humans are having trouble beating the market, but it appears that…

A Lesson In Humility

If you asked me what I thought about bitcoin a year ago, I would have said it’s ridiculous. Today I have no opinion. My knowledge of cryptocurrencies is unchanged over the last year, but bitcoin is up 240%. Then: A digital currency? What does that even mean? Can’t it get hacked? And what sort of…

All-Time High

On the final trading day of the first quarter in 2013, the S&P 500 made an all-time closing high. Five and a half years and 1375 trading days had passed since that last happened. On March 28, 2013, stocks wrapped up their strongest first quarter since 1998 and the S&P 500 (SPY) was up 149%…

Be Good Enough

There are new investment products hitting the shelves every week. This fierce competition amongst asset management companies is driving down expense ratios, but investor’s are potentially paying higher costs. There are 50 U.S. Large Cap ETFs with over $500 million in assets, which means there will always be something in that category doing better than what…

Emotional Adjustments

The Warriors set a record by winning fifteen straight playoff games. But that came to an end in game 4 when they got their asses handed to them. They lost by nineteen points and played from behind the entire game, there were zero lead changes. After the loss, Steve Kerr said, “The biggest adjustment you…

These Are the Goods

Articles Your best investments are likely to be made outside of the financial markets. By Cullen Roche Investors want what they can’t have. By Ben Carlson There’s a big difference between statistics and strategy. By Charlie Bilello Pay attention to new information that can change a situation and adjust accordingly, but don’t fixate. By Dina…

Experience Is Overrated

The machines have arrived on Wall Street. In 2016, quant driven hedge funds took in $13 billion while the rest of the industry lost $83 billion. One of the biggest appeals of eliminating the qualitative element that dominated the industry for so long is that quants sever the tie between emotions and decisions. Machines don’t carry…

Satisfaction Yield

Investing is personal. Behind data and numbers are emotion and feelings. It’s one thing to read The Great Crash, it’s another thing entirely to read The Great Depression: A Diary. One provides the macro- how much stocks fell and how high unemployment got- the other provides the micro, the human element. Here’s Benjamin Roth writing in his…