Separating Decisions

The amount of time between the scary events taking place in our country and all over the world seems to be narrowing at a rapid pace. The human tragedies that the world is experiencing are unthinkable and beyond sad to watch. But looking at the market’s response to crisis, we learn that no financial decisions,…

Long-Term, Really Long-Term, And What You Should Focus On

William Bernstein has an interesting stat on the really, really long-term returns of stocks, in his book Deep Risk. The second half of the twentieth century was extraordinarily kind to global investors, but the first was not. Brian Taylor of Global Financial Data Inc. notes that during the tragic half century between 1899 and 1949,…

Elevator Down, Elevator Up

If you’re reading this, you probably already know that the S&P 500 made a new all-time high today. The streak ended at 285 days, the longest stretch without a new high since the 2007 peak was taken out. What’s particularly interesting when looking at all of the previous highs is that they tend to happen all…

Bizarro World

The typical long/short equity strategy- the one that Alfred Winslow Jones used in the 1950s to put hedge funds on the map- goes long cheap stocks and short expensive ones. It’s fair to say that Jones would be shocked at the current market environment. Recently, Mondelez put in a bid to buy Hershey, which would bring…

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…