The Great Financial Crisis was missed by such a large number of pundits, economists and investors that during the ensuing recovery we’ve seen a huge influx in the number of people trying to predict a the next downturn. People desperately want to call the next big one before it hits. First it was fears of…
Investors in Search of 7-Minute Abs
One of my favorite scenes in the movie There’s Something About Mary is when Ted, played by Ben Stiller, picks up a hitchhiker. The hitchhiker goes on to tell Ted about his brilliant business idea inspired by the 90s workout phenomenon, 8-Minute Abs: Hitchhiker: You heard of this thing, the 8-Minute Abs? Ted: Yeah, sure,…
Are European Stocks Cheap or is the U.S. Expensive?
One of the most counterintuitive aspects of investing is the fact that you almost need to have bad news for things to get cheap enough to create a good long-term value. Markets or securities don’t become undervalued all on their own. There’s usually a catalyst involved in the form of poor fundamentals, bad news, missed…
How To Pick The Right ETF
ETFs are one of the greatest financial product inventions investors have ever seen. They’re low-cost, tax-efficient and transparent. Maybe best of all they’re extremely convenient, offering diversified or niche strategies that would have been nearly impossible for most investors to put together themselves in the past. Investors have taken notice based on the fact that…
The Cost of Not Paying Attention
I’m constantly amazed by the number of stories I read each year about wealthy people getting swindled in a Ponzi Scheme or being taken advantage of by a shady financial advisor. The wealthy are by far the biggest targets for fraud and scams and yet they are still far too trusting and nonchalant about who they give their…
We’re in a Bunny Market
Since the end of 2014 there has been plenty of movement in the stock market but the S&P 500 hasn’t really gone anywhere: These periods can be very frustrating for investors because most people tend to think in terms of being bullish or bearish. They’re constantly looking for the end of the bull market or…
How a Single Investment Can Make or Break Your Reputation
“It takes 20 years to build a reputation and five minutes to ruin it.” – Warren Buffett One of the amazing things about the financial markets is that a single investment idea can either make or break your reputation for years to come. Take John Paulson for example. During the financial crisis Paulson made what…
Andy Grove on The Importance of an Outsider’s Perspective
One of the things that never made sense to me while attending business school was how to apply all of the theories and case studies we were learning to the real world. In most management books you read about successful companies and try to figure out their recipe for success. But the real world is complicated…
Smart Beta Crash Coming?
Rob Arnott from Research Affiliates caused a bit of a stir in the fund world a few weeks ago when he called for a potential crash in smart beta funds. Here were the main takeaways from his recent research paper: 1. Factor returns, net of changes in valuation levels, are much lower than recent performance suggests….
Some Things I Don’t Understand
A few things I’ve been pondering lately… Why has the average credit card rate remained at ~15%? Interest rates on mortgage, bonds and car loans have all fallen drastically since 2007. Why not credit card rates? I understand these rates need to be higher but why has the spread compared to other credit instruments not…
