Contrarian Indicators

March 15, 2013. CNBC ran an article with the headline Mila Kunis rotates from cash to stocks.  In it, the author wrote, “Her words sparked a lively response on Twitter. Financial Acrobat, a trader, consultant and tweeter of financial news, warned that it could be a contrarian signal. ‘When people like @FoxonStocks and @RealMilaKunis start…

These Are the Goods

Articles You could own a hundred funds and be concentrated in one risk factor or you could own five funds and have a healthy balance of risks By Phil Huber Claiming that Apple’s iOS keeps Google honest is the same as if Toyota, after putting all car companies out of business, professed that Boeing keeps the…

No, No, No

No, the S&P 500 is not a momentum fund. When Netflix was added to the S&P 500 in December 2010, at $10 billion, it represented 0.08% of the index. Today, 1200% later, Netflix has grown to 0.65% of the index and is now the 33rd largest component, behind Pepsi and Disney. With this example and…

They All Fall Down

Yesterday Facebook had a market capitalization of $602 billion. Today it’s $500 billion. A 20% decline in one day hurts, a lot, but this is type of move happens from time to time in the strongest stocks. Even after today, Facebook is still up 500% over the last five years. One common theme amongst the…

What Do Ratios Tell You?

General Motors has done $140 billion in revenue over the last 12 months. Its market capitalization is $53 billion. Based off its price-to-sales ratio (0.37), it’s the 9th cheapest stock in the S&P 500. These are facts, but of course there’s a lot more to the story. When GM reported earnings today, management reduced its…

Animal Spirits: The Worst 401(k) Advice

On this weeks Animal Spirits, we discussed: The Pareto Principle Ben’s take on concentration in the stock market The worst 401(k) take ever.  History of the 401(k) Fidelity’s retirement data Liquid alternatives The Vanguard of hedge funds? The value winter Survey of the week Housing regrets 4-day workweek  America is running out of caregivers Can…

Thinking Big and Survivorship Bias

Larry Page once built a programmable ink-jet printer out of Legos. Sergey Brin was described as a nerdier Steve Jobs. (Playboy interview) These guys aren’t faking it. Page and Brin met as graduate students at Stanford, where they created an algorithm called PageRank, which would form the basis of Google as we know it today….

Pick One Stock

I recently spoke with Michael Samuels about my book and investing in general. Michael is the portfolio manager of Broome Street Capital, a fund that specializes in m&a and event-driven trading. I’ve done half a dozen podcasts at this point about the book, and this was easily my favorite discussion. Michael is in the business,…

These Are the Goods

Articles The key to changing your worldview on time is knowing when to trade it for money. By Nick Maggiulli The inversion would likely be a premature “sell equities” signal By Tim Duy China uses control over electronic communication in vastly draconian cyber dystopia ways compared to the wide range of opinions that are allowed online in…

Pareto

I tweeted this chart earlier. This chart shows that the five largest S&P 500 stocks have a market capitalization equal to the bottom 282 S&P 500 stocks. This turned out to be something of a Rorschach test, which was not my intention. I just thought it was a powerful visual. I wasn’t really trying to…