There’s A Large Spread Between Large And Small

The S&P 500 always gets the majority of the attention and understandably so, as these 500 504 stocks comprise ~80% of the total U.S. market cap. But something interesting recently happened in the Russell 2000, which represents just ~8% of the total U.S. market cap. The Russell 2000 has made no progress over the past…

Eating Your Own Cooking

Wouldn’t you love to know how people actually invest. It’s one thing to follow somebody on Twitter or to read their blog, but at the end of the day we have no way of knowing if that person actually practices what they preach. I want to lay my cards on the table, and share how…

The Problem With Average

“Statistician, a person who lays with his head in a oven and his feet in a deep freeze stating, On the average, I feel comfortable”- Bruce Grossman Peter Bernstein describes the average and standard deviation of returns perfectly, he said: “The greater the variance or the standard deviation around the average, the less the average…

An Object In Motion

Emerging Markets have been a serial disappointment. Over the past five years they’ve been a money loser and were a huge opportunity cost relative to U.S. stocks. But alas, there is at least a glimmer of hope that things might be changing. Emerging Markets (EEM) have spent the last 184 days below the 200-day moving…

Fool You

“The main purpose of the stock market is to make fools of as meny men as possible.” -Bernard Baruch The other day I pointed out the unusual weakness out of small cap stocks. I also added the caveat that it was likely not indicative of anything, which is about as close to a prediction as…

The Last Straw

My first job out of college was with a life insurance  financial planning company in Manhattan. At first it was a pretty seductive, high energy environment. Unfortunately reality reared its ugly head pretty quickly thereafter. I couldn’t understand why life insurance was the right product for everybody, whether they were 30, 40, 50 or even…

Paralysis By Analysis

While many people have recently said it has never been a better time to be an investor, one can also make the case that it has never been as confusing. Between index funds and mutual funds, hedge funds and fund of hedge funds, ETFs and ETNs, financial advisors and robo advisors, there is an overwhelming…

Surviving The Short Term

Thinking and behaving for the long term is one of the most difficult challenges an investor is faced with. Although simply buying and holding has produced fabulous returns, this type of investing requires you to commit to several sizable drawdowns, likely to be over fifty percent in some cases, over the course of your investing career….

The Fool’s Gold

“Patterns are the fool’s gold of financial markets” Benoit Mandelbrot In 1976, a group of economists discovered that stocks tended to do well in January, small cap stocks in particular. Small cap stocks returned 26% in January of 1975 and an 18% in January of 1976, enough to get anybody’s attention.  This came to be…

Are We Due For A Recession?

That depends on what you mean by “due.” Are we due in the sense that it has been a while since the last recession? Sure. Since 1926, recessions have happened on average every 59 months. We’re currently 80 months removed from the last recession. Are we due in the sense that stocks have gone too…