Off to the Races

September 4, 2016

As we approach November 8th, I am repeatedly asked, “How will the outcome of the upcoming elections impact investment markets, and which is better for the stock market – Republican leaders or Democratic?” My honest, easy answer (or non-answer) is always – “it depends”. However, let’s see if any broad generalizations can be made based…

Use It or Lose It

June 4, 2016

Every time investors believe global central bankers are running out of ammunition to fight sluggish economic growth, policymakers return to the theoretical drawing board, adopting increasingly radical policies that economists can “prove” work in theory, but have minimal practical evidence will work outside of the lab. One of the more recent experiments surrounds the adoption…

The Details in the Dollar

November 5, 2015

In the same week the Federal Reserve shut off the printing presses, the Bank of Japan ordered more ink and paper! On Halloween, Haruhiko Kuroda, the Governor of the Bank of Japan shocked the investing community by announcing the central bank would increase its quantitative easing program, boosting its monetary base at an even faster…

Balancing Act

November 4, 2015

Humility and confidence, two conflicting personality traits, are both critical to long-term investment success. Confucius said that real knowledge is knowing the extent of one’s ignorance. The ability to acknowledge one’s ignorance is rarely seen in an industry relying on “experts” to gain a competitive advantage.

Mercy Rule

August 14, 2015

I spend many weekends watching my son play little league baseball. The game consists of six innings; however, if the losing team is down by more than 15 runs after their third at bat, the mercy rule applies and the game officially ends. “After” is emphasized as the umpire ensures the losing team always gets…

Active vs Passive, What’s the Difference?

May 4, 2015

The active versus passive investment debate has been going on for decades. John Bogle, the founder of Vanguard, has called active management that relies on superior stock picking a “loser’s game.” While active advocates point to legendary investors like Ben Graham, Warren Buffet, Peter Lynch, Sir John Templeton, Julian Robinson…as evidence superior stock picking can…

Oil Slick

February 15, 2015

“The oil industry is like a ship with its center of gravity above the water line, says Jeremy Elden of Germany’s Commerzbank. It can sail smoothly for years, but capsize suddenly in rough seas – and do so quite rapidly. An unprecedented combination of excess supply and weak demand has created just such rough seas…

Blind Faith

August 20, 2014

I open nearly every presentation defining risk as more things can happen than will happen. Uncertainty is a broader concept focusing on the clarity surrounding the range of things that can happen. Most people look backward to deal with uncertainty, reviewing what happened historically to build their forward-looking probabilities. However, like everything in the investment…

Not Again

May 5, 2014

I probably too often use as an illustration the Capital Allocation Line (I can hear you saying “not again.”)  And, while I write about it semi-annually, I think about it constantly. One of my choice Warren Buffet quotes is “Investing is simple but not easy.” The theoretical concept behind the Capital Allocation Line is simple…

Is Time Really Money?

February 15, 2014

It often feels my job is to understand how financial markets should work in theory and then to explain why they don’t. Over the past fifteen years, I have read thousands of investment related pieces and find myself referring back to a select few that have profoundly shaped my understanding of investment markets. One of…