April 2018

This Tells You Nothing

The average market strategist has a 2,943 year-end price target for the S&P 500. This is at the upper range of the typical 8 to 10% return that we expect strategists to expect every year. With an annual standard deviation of 20, an 8% average return means that stocks will return between -8% and +28%…

Evolving ETFs

A few weeks ago Tadas Viskanta asked a bunch of bloggers the following question: What ETF, if it were launched tomorrow, would you invest in with little (or no) hesitation? Said another way what asset class or strategy is not currently (effectively) available in an ETF wrapper?  My answer: Nothing. I’m content. Little did I know that…

Animal Spirits: Some Things We Learned

Stories Discussed Asia is disrupting Silicon Valley This guy has a $76,000 pension. Per month.   Germans save a lot of money.  Ben says the 200-day is bullet proof.  What if the future is better than we think? Everybody expects lower returns.  Borrowers are pushed deeper into debt.  But the next recession doesn’t have to mirror…

At First Glance

Some things look really impressive at first glance. Walking on burning wood is a perfect example, which John Allen Paulos writes about Innumeracy: Mathematical Illiteracy and Its Consequences: The practice has often been cited as an example of “mind over matter” and you don’t have to be innumerate to be impressed initially with such a feat….

The What-Ifs

Poker is a what-if game. What if I re-raised instead of just called. What if I got the Queen on the river. What if I just folded pre-flop. There are 2,598,960 possible  hands, so if you ever played, you’ve agonized over the what-ifs. Life delivers an endless array of what-ifs, because we only experience one version…

These Are the Goods

Articles Experience is a hard teacher because it gives the test first, and only then provides the lesson. By Carmen Sanchez and David Dunning Seeking out problems for which no solution currently exists By Amanda Cantrell It’s an uncertain business By Ben Smith Being human is being able to enjoy life By Khe Hy You…

Here We Go Again?

What are the chances that the next recession looks like the last one? I guess that number can’t be quantified, but I’d also guess that it’s a lot lower than people expect. The banks were at the epicenter of the greatest financial crisis this generation has ever seen, so it’s natural to think “here we…

We’re All Selling

“A.B.C. Always be closing.” When I hear the word salesman, this is what comes to mind. Scenes and images like this lead us to believe that selling is a zero sum game, with all of the benefits going to the seller, and very little accruing to the buyer. There are two types of products- ones…

Animal Spirits: The False Breakdown

Stories mentioned It’s financial literacy month A little learning is a dangerous thing The value of I don’t know Is college worth the cost? Investors want out of Pershing Square Did Einhorn lose his mojo? The last superstar investors This Novogratz profile is worth reading.  A hedge fund bought the Denver Post. The writers are…

The Risk

Investors have been worrying about a rising rate environment for a few years now. What would that do to their bonds, and how would a normalization in rates affect stocks? The jury is still out, but so far so good. From July 2016 through February 2018, the ten-year treasury rate rose from 1.37% to 2.94%….