“The higher the VIX the higher the clicks.” – Phil Pearlman
Forecasting Your Emotions
“People who rely heavily on forecasts seem to think there’s only one possibility, meaning risk can be eliminated if they just figure it out.” – Howard Marks
It Is Always The Same Novel
The Nobel Prize for Literature was awarded this morning to a French author by the name of Patrick Modiano. Modiano has written more than 20 novels, with the first one published in 1968. What I found interesting about his story is that he said he is “always writing the same book.” Here’s more: Modiano says…
Here’s The Problem With Underperformance
“A relative-performance-oriented investor is generally unwilling or unable to tolerate long periods of underperformance and therefore invests in whatever is currently popular.” – Seth Klarman
Feast or Famine in the Fairholme Fund
It was a tough couple of days for star portfolio manager Bruce Berkowitz’s Fairholme Fund (FAIRX) last week. The fund lost nearly 10% on the week, with much of that loss coming on a single day. Over the past month it’s down more than 13% even though the S&P 500 is down less than 2%.
Global Diversification: Accepting Good Enough to Avoid Terrible
The U.S. stock market is once again trouncing the broader international markets this year. Through the end of September, the total U.S. stock market, as measured by the Vanguard Total Stock Market Fund, is up nearly 7% while the Vanguard Total International Fund is basically flat on the year. Since the beginning of 2013, the…
Fat Tails and Hyperinflationary Fears
“Stocks, although suffering from inflation in the short term, protect against it in the long term.” – William Bernstein
The Psychology of Lower Returns
“Building a plan around the phrase ‘sometimes you get lucky’ is not a plan.” – Cliff Asness Bloomberg aired a great sit-down interview with John Bogle and Cliff Asness last week. They covered a wide range of topics, but the one I thought was the most important for investors was that both agreed we will…
The Post-2008 Investment Conference Line-Up
The severity and depth of the financial crisis caused a shift in attitude for many in the financial world. Many things changed for investors following the crash, but especially the way we think about risk. It was a scary time and for many the fear never went away. The intellectual case for fear has always…
Will Rising Rates Hurt REIT Performance?
The prevailing wisdom on real estate investment trusts (REITs) is that they’ll be doomed once interest rates start to rise. Because of the way REITs are structured for tax purposes they have to pay out at least 90% of their taxable income in the form of dividends. The thinking goes that higher interest rates will…