“U.S. stocks were up nearly 400% in the 1980s. All anyone remembers is the 1987 crash.” (Ben Carlson) “Corrections come a lot slower than anyone expects, but once they happen they escalate faster than most could imagine” (Ivanhoff) “Indices have a tendency to come back, stocks are a different story, most don’t make it.” (Frank…
Should Investors Stay the Course?
“Risk control is invisible in good times but still essential, since good times can so easily turn into bad times.” Howard Marks As U.S. equity markets enter a correction you’ll hear a lot of people scoff at the phrase “stay the course.” For whatever reason, people seem to think that the portfolio of those on…
The Good, the Bad and the Ugly
The market had a rough week and the financial media was handed a plethora of scary statistics on a silver platter. When markets evoke emotions, its really important to stay away from reading or watching things that can cause you to make bad decisions. I took the liberty of collecting some articles and to my…
The Power of Framing
Daniel Kahneman, one of the pioneers of behavioral economics, describes framing in his Thinking, Fast and Slow: “Framing effects: Different ways of presenting the same information often evoke different emotions. The statement that ‘the odds of survival one month after surgey are 90%’ is more reassuring than the equivalent statement that ‘mortality within one month…
What Makes a Great Investment Article?
Morgan Housel is one of my favorite writers in all of finance. He had this to say on what makes an investment article great. Morgan believes that the best posts are evergreen and I totally agree. One of my favorite pieces of all time comes from Jason Zweig, written in 2001. This post will be…
Obliterated
There has been a lot of talk about how just a few leaders are responsible for buoying the markets. You might be thinking about the outsized gains in Netflix and Amazon, however, we are seeing massive relative out performance of the larger stocks not just in the S&P 500, but in the Russell 2000 as…
Looking Inside The Market
Although U.S. equity indices are hovering near all-time highs, the average stock in the Russell 3000- which covers 98% of the investable market- is already in “bear market” territory. How can it be that the average stock is down 20% from its 52-week high while the index is just 2.9% from its all-time high? There…
Paul Tudor Jones, Analogs, and Jeff Bezos
More Money Than God by Sebastian Mallaby is one of the most entertaining finance books I’ve ever read. It’s like the Market Wizards series, only in story form. I found myself scribbling notes all over the place and wanted to share a few pieces that I found particularly interesting, emphasis mine. Analogs “A story in…
Twas Ever Thus
One of the greatest top ticks of all time comes from the October 1968 edition of New York Magazine (emphasis mine): “You’ll hear fabulous success stories- like the hedge fund guy who made 20 per cent on his money in a week, for seven weeks in a row. ” “If, then, our hypothetical hedge fund can…
Some Thoughts On Emerging Markets
Emerging Markets have been performing awfully lately. And by lately, I mean the last six years in which little progress has been made. To make matters worse, there was a huge opportunity cost of having capital allocated away from U.S. equities. After six years of sideways movement, Emerging Markets are beginning to really move again,…
