Happy Anniversary!

Today in market history, 2000: The NASDAQ Composite hits its final all-time high. Over the next 31 months it will lose 78% of its value. pic.twitter.com/Kb9wIEZdhl — Ritholtz Wealth (@RitholtzWealth) March 10, 2017 During the Russian financial crisis of 1998, the NASDAQ fell 33% from July through October, but during the final 58 days of…

How Long Will This Bull Market Last?

You’ve probably already heard that this week marks the eighth anniversary of the bull market. Some would argue, myself included, that bull markets don’t start at the depths of a bear, but whatever, let’s just go with it for the purposes of moving past a dead and beaten horse. The United States has only experienced…

What If Earnings Never Collapsed?

The S&P 500 fell 57.69% from October 2007 to March 2009, but real earnings fell even more, from a high of $98.43 in June 2007 to a low of $8.01 in April 2009, a 91.86% decline. Some might think that this historical collapse is inflating the CAPE ratio. In other words, if real earnings didn’t…

Iceberg & Arugula

Adam Smith once said “Show me a portfolio, I’ll tell you the generation.” It’s safe to say if he peeked inside a brokerage account today, he wouldn’t recognize which generation he was in. The story we keep hearing about is the shift from active to passive, and while it’s true that dollars are leaving stock…

Can You Predict Bubbles?

“For bubbles, I want a systematic way of identifying them. It’s a simple proposition. You have to be able to predict that there is some end to it. All the tests people have done trying to do that don’t work. Statistically, people have not come up with ways of identifying bubbles.” – Eugene F. Fama,…

Two Point Seven Five & Twenty-Seven

A few legendary hedge fund investors have been able to overcome the burden placed on them by the nature of their fee structure. Paul Tudor Jones is one of these managers. According to a recent Wall Street Journal article, his flagship fund has had average annual returns of 17% over the last three decades, after…

A Little Can Go A Long Way

When thinking about their financial situation, most people spend way more time thinking about investing than they do about spending and saving. If I had to guess, I’d say the breakdown looks like something the chart below.   It should be the exact opposite, because saving and spending is something we have complete control over….

Handcuff Volunteers

A few weeks after the election, a friend of mine told me he sold all of his stocks in his 401(k). He was happy with the 13% his portfolio earned in 2016 and felt that stocks had gone too far too fast. He understands that he can’t time the market, but he just couldn’t help…

How To Survive A Bear Market

Not everybody can sit through a bear market. Sure, guys like Buffett and Munger never sell, but for the 99% of us who have emotions, we need to do something to de-risk when it looks like the world is falling apart. But what so many investors get wrong is that they don’t have a process…

The Bear Market That Nobody Talks About

It’s generally accepted that the current bull market began in March of 2009, which means that stocks have been running for 2002 trading days. I’m not on board with this line of thinking. Forget the first point, that the bull started at the lows in 2009, as opposed to 2013 when the 2007 highs were taken…