In a speech to USC Law School graduates, Charlie Munger shared his thoughts about the problem with extreme viewpoints: Another thing I think should be avoided is extremely intense ideology because it cabbages up one’s mind. When you’re young it’s easy to drift into loyalties and when you announce that you’re a loyal member and…
Diversifiable Risk in Sector ETFs
Energy stocks are the big loser this year as oil continues to get crushed. The SPDR Energy ETF (XLE) is down almost 14% while the S&P 500 is up over 11% in 2014. ETFs are widely considered to be the equivalent to an index fund, and in many ways they are, but it all depends…
The Cast of Characters on Finance Twitter
Twitter is one of those Internet services that’s extremely useful if you know what you’re doing and who to follow, but seems odd and ridiculous to non-users that don’t have any experience on the social networking site. For me, Twitter has turned into a one-stop-shop for news, instant reactions, interesting reading material, debates, the sharing…
Some People Will Never Learn
China’s economic growth has been unheard of over the past few decades, but it has yet to translate into stock market gains. Here’s a nice chart from Alliance Bernstein comparing the GDP growth and stock market gains between China and Mexico since the early 1990s:
What Happens to Stocks and Bonds When the Fed Raises Rates?
Now that the economic data is picking up, investors will turn their attention to the what the Fed will do with short-term interest rates. People have been contemplating when the Fed will raise rates for some time, but improving employment numbers and GDP growth have really ramped up the speculation on that first rate hike….
“I have a high tolerance for repetition.”
Esquire is the only print magazine I still subscribe to. They always seem to have a good cover story, usually an interview with a big movie star. I base my reaction about the movie star on one question: Would I want to have a beer with this person? In the most recent interview from the…
How the U.S. Dollar Affects Your Portfolio
A funny thing happened as the end-of-the-world crowd was busy predicting a collapse of the U.S. dollar caused by the Fed’s monetary policies – the dollar has rallied mightily. Karen Damato at The Wall Street Journal ran a very telling chart this week that shows the effect the dollar’s rise has had on foreign stock…
How Sector Rotation Wreaks Havoc on Investors
Charlie Bilello from Pension Partners posted a great chart in a recent post:
What Caused the Great Depresssion?
The price of oil is down nearly 40% in five months, a swift fall in one of the most important and visible commodities in the world. After seeing such a crash in price, investors and pundits are quick to trot out the specific reasons for the decline. I’ve heard many people this week give the…
Not All Active Funds Consistently Underperform
There was a mind-blowing stat flying around last week that showed less than 10% of all U.S. stock funds are currently beating the S&P 500 in 2014. Over longer time frames, the fact that most index funds beat the majority of actively managed funds is a given at this point, but indexing always looks even better…
