“The term bubble should indicate a price that no reasonable future outcome can justify.” – Cliff Asness There’s been a steady stream of bubble talk since the financial crisis. Everything that goes up in value ends up being called a bubble — stocks, bonds, gold, IPOs, biotech, Silicon Valley, etc. Most investors seem surprised more…

“I’m trying to manage myself, not just my portfolio.” – Guy Spier

When asked what people would learn from the financial crisis, GMO’s Jeremy Grantham replied: In the short term a lot, in the medium term a little, the in the long term, nothing at all. That would be historical precedent. As they say, we don’t want to let a crisis go to waste. Here are some…

“The paradox of skill says that when the outcome of an activity combines skill and luck, as skill improves, luck becomes more important in shaping results.” – Michael Mauboussin I recently wrote a post about how size is the enemy of outperformance. My main point was that extreme levels of outperformance become nearly impossible to pull…

Earlier this month the Wall Street Journal posted an excerpt from a letter written by a hedge fund manager to his investors stating the reasons (see also: excuses) he had to close down his fund. Here’s part of the rant: Post-2008 monetary policies have rewarded the beta investor who’s gone “all in” on market risk and themes,…

Earlier in the year many investors were under the impression that something had to give because stocks and bonds were both rising.  I looked at the historical data on positive stock and bond returns to show that this is more common than most investors assume: Since performance has been so strong in both stocks and bonds…

A few weeks ago I took part in a webcast with MarketWatch on long-term investing that was partly spurred on by a post I wrote about my idea for a TV show about investing. MarketsWatch’s Victor Reklaitis ran the show while I was joined by Tim Strauts from Morningstar and Chuck Jaffe of MarketWatch to…

“Diversifying is easy; doing so early is difficult.” – William Bernstein

“The wonderful thing about emerging markets is that they can get terribly cheap from time to time.” – William Bernstein The quilt above, courtesy of the Novel Investor, shows the annual performance numbers for the largest emerging market countries going back to the year 2000. Like any asset allocation quilt, it looks like complete chaos…

Based on the MSCI World Index, the U.S. stock market makes up over 50% of global equity markets. We constantly hear updates about the Dow Jones, S&P 500 and even Russell 2000, but rarely pay attention to foreign markets. This home bias causes many investors to overweight U.S. stocks in their portfolio. As everyone debates the current…