What If You Only Invested In Stocks When They Were Cheap?

Nobody likes to overpay, whether it’s for food, clothing, a house, or stocks. The problem is people don’t treat stocks the way they do a car, groceries, or jeans. If a cucumber goes from $2 to $10, you wouldn’t say “wow, I need to buy some before it goes to $20.” You would simply substitute…

My 2015 Favorites

  Wow, this year went really fast. It feels like just yesterday that the Fed finally decided to raise rates. I wanted to share some of my favorite things from 2015. Podcast: I am lucky to be able to help Barry prepare for Master’s in Business. Some guests I’m more excited about than others. I would…

Momentum Investing Predates the Civil War

“There is nothing new in Wall Street. There can’t be because speculation is as old as the hills. Whatever happens in the stock market today has happened before and will happen again” – Jesse Livermore Long before Cliff Asness wrote his dissertation on momentum, Alfred Cowles and Herbert Jones discovered that stocks tended to move in…

In a Tight Range

As we await for the inevitable(?) first rate hike since 2006, let’s take a moment to review what type of year it’s been for U.S. Stocks. The S&P 500 has done a whole lot of nothing this year and currently is up just 0.04%. Looking at this minuscule number helps clarify what we already know,…

Looking For a Ten Bagger?

The other day I looked at a common theme among the decade’s biggest winners; they tended to be very expensive relative to their peers based on traditional valuation metrics. Today I want to look at another trait these winners share, volatility and big drawdowns. A few things really stand out in this table. Nine of…

Do Expensive Stocks Price In Future Growth?

One of the common themes among the very best performing stocks is that they are attached to a high price-to-earnings ratio. It makes sense that the fastest growing companies deserve a higher multiple than the average stock. You’ll notice in the table below that nine out of ten of the strongest stocks over the past…

Can Stock Market Forecasters Forecast?

Long before Jim Cramer’s record was being dissected, Alfred Cowles was skeptical of the claims made by stock market pundits.  Cowles, who later founded the Cowles Foundation for Research and Economics, spent years working on a paper published in 1933, “Can Stock Market Forecasters Forecast? His mission: “It seemed a plausible assumption that if we could…

Calling It Versus Nailing It

It’s one thing to call a trade, it’s another thing entirely to profit off that call. First, there’s the issue of timing. Then you have to be able to execute; when to get in, press your bet, take profits, etc. The excerpt below is from Gregory Zuckerman’s The Greatest Trade Ever (emphasis mine). Investment advisor Peter…

Thinning of the Herd

  There has been a lot of talk lately about the lack of participation; how only a few stocks are actually rewarding shareholders while so many have been burning them. Winners have been few and far between but it’s not as if the index is exactly on fire. While it’s true that without Amazon and…

Tis The Season

I tend to be on the skeptical side when it comes to investing based on seasonal trends. I’m almost always of the mind that less is more and seasonality encourages more decision making, not less. Making changes to your portfolio based on this type of study would probably not be in your best interest when…