Looking Back at the End of a Secular Bear Market

This week in 1982 marked a major milestone in the history of the stock market. The Dow Jones Industrial Average closed above 1,000- its highest levels in nearly a decade- and it was on the precipice of saying sayonara to a 16-year bear market. A new secular bull market was right around the corner and…

A Spec of Sand on a Long Beach

Over the weekend I listened to Russ Roberts’ interview with Jason Zweig, who made an excellent observation of how vast the financial markets are and how little time investors spend thinking about this: I think if there’s one overriding theme to the book, one of the things I’ve tried to get across in The Devil’s…

Forget Investing Like Buffett, Try Investing With Him Instead

John Hempton recently wrote an excellent piece about why nobody can even come close to replicating how Warren Buffett invests. He notes that even the acolytes don’t pass the sniff test: Find any investor who models themselves off Warren Buffett and look at what they do. And look at their investments against a twenty punch…

The Difference Between Life Insurance and Credit Default Swaps

Every day, shortly before nine o’clock, a man with a red hat stands in a square and begins to wave his cap around wildly. After five minutes, he disappears. One day, a policeman comes up to him and asks: “What are you doing?” “I’m keeping the giraffes away.” “But there aren’t any giraffes here.” “Well,…

They All Have One Thing In Common

All of the great investors, from Seth Klarman and Howard Marks to Warren Buffett and Phil Fisher, have one thing in common- their ability to clearly communicate their philosophy. Great investors need to be masterful in delivering their message in order to see their clients or partners through difficult times. Jack Bogle rightfully gets all…

Beating Your Own Investments

Add Julian Robertson and Howard Marks to the long list of billionaires that are less than optimistic about the future. All the reasons they cite are unfortunately very compelling, but pessimists always sound intelligent. You can probably count on one hand the number of investors that were actually able to capitalize on their pessimism. But…

The Point Of No Risk

“When everyone believes something is risky, their unwillingness to buy usually reduces its price to the point where it’s not risky at all. Broadly negative opinion can make it the least risky thing, since all optimism has been driven out of its price.” This Howard Marks quote is the perfect way to describe what’s happened…

If You’re Buying, Who’s Selling?

A few weeks ago at dinner I was getting set to order a brisket sandwich. Then I saw that this tower of goodness, which was covered with beer braised bacon and other accoutrements, came with a hefty price tag of 1400 calories. I thought better and went for the grilled chicken instead. Investors could use…

Looking For Signals

In September 1929, just three days before the market crashed, Irving Fisher famously said “Stocks have reached what looks like a permanently high plateau.” He died 18 year later, having never seen stocks at a higher level than when he made that statement. A few weeks earlier,  a more glaring, yet overlooked contrarian signal was provided…

Bigger, Stronger and Luckier

Professional football players today bear little resemblance to the ones who suited up in the past. In the 1920s, the average offensive lineman- the biggest guys on the field- were 6’0 tall and 211 pounds. To put that in perspective, Odell Beckham, a smallish wide receiver is 5’11 and weighs 200 pounds. Source: Business Insider…