Some Thoughts on the Extreme Early Retirement Movement

A reader asks: My question to you is what are some of your financial goals? Do you hope to retire early or try to become financially independent someday to quit your job and do something else? I’d love to hear you address the ERE movement. It’s hard to see a week go by these days…

Stock Market Yields Are Higher Than You Think

Capital allocation is one of the most important decisions management has to make for corporations. Changes in regulations have made it more important over the years for investors to pay attention to not only dividend yields, but also share buybacks, debt repayment and M&A. This piece I wrote for Bloomberg goes over how things have…

Every Time Stocks Fall…

This past Tuesday the NASDAQ Composite fell 1.6%. Then on Thursday, it fell another 1.4%. A few weeks ago it dropped 1.8% on a single day. Since stocks bottomed in March of 2009, the NASDAQ has fallen by 1% or more on nearly 280 occasions, or more than 13% of all trading days. Since its inception…

Split Brain: Understanding Cause and Effect

“Stories are what stick with us. Statistics do not.” – Michael Mauboussin Going into our EBI West Conference I wrote about how excited I was to hear Michael Mauboussin speak. He didn’t disappoint. Mauboussin walked the crowd through a series of stories, examples and behavioral studies to understand how to make better decisions or avoid…

How Markets Respond to Tax Reform

Investors love a good story which is why rules of thumb and simple cause and effect relationships tend to get a lot of traction whether they’re backed by actual evidence or not. In terms of policy, many seem to believe that a reduction in tax rates will be a huge boom to the stock market….

Predictive vs. Diagnostic Frameworks

Philip Tetlock has spent his career studying experts and prediction. One of his studies involved nearly 300 economists, political scientists, intelligence analysts and journalists. They tallied almost 30,000 predictions in their respective fields. The average expert wasn’t much better than a random guess. And the more confident they were in their predictions the worse they…

Playing All The Hands You’re Dealt

Fargo is in the conversation for the best show on TV right now. I just finished up with the third season which, like the first two seasons, had a great combination of suspense, dark humor, crime, solid characters and a heavy dose of Minnesota accents. In one of the best scenes in the season finale…

Patience Exemplified

The technology bubble during the late-1990s will likely go down as one of the most difficult market environments ever for fundamental investors. Growth strategies absolutely crushed value strategies and anything invested outside of technology or internet companies appeared foolish. Warren Buffett’s Berkshire Hathaway stock was down nearly 20% in 1999 while the Nasdaq zoomed higher by…

How to Invest in an Overvalued Market

Investors have been warned about overvalued markets basically since the start of this stock market recovery. Some people are scared of above average valuations. Others simply choose to ignore them. And still others use them as scare tactics to sell financial product or newsletters. While you can’t control what the current market valuations are you…

Talking What Could Bring Down the Bull Market on WDYM

Predicting when a bull market will come to an end is a fool’s errand because no one can forecast with any certainty the timing of a shift in investor emotions or preferences. There have been hundreds of legitimate reasons given over the past few years for the reason the bull market is going to come…