“If every stock you own is on the new high list, you’re a momentum guy. If every stock you own is on the new low list, you’re out of business.” – Leon Cooperman Mean reversion is one of the most powerful forces in all of finance. Above average performance is eventually followed by below average performance….

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

“A goal without a plan is just a wish.” – Antoine de Saint-Exupery This was the headline and first few sentences from an AP story last weekend: Time to Ditch Rising Stocks, or Stick With Them? Is it time to cash out of stocks? The market has nearly tripled in a little over five years, and…

The trend towards passive investments continues to gain steam as more investors are opting for lower cost fund options. See this chart from Morningstar via Victor Reklaitis of MarketWatch:

“Investors are always fighting the last war, when in fact all crises are different.” – Harry Markowitz People have a hard time understanding risk. We only seem to worry about something after it happens instead of preparing for inevitable problems ahead of time. This comes from last week’s Wall Street Journal after the earthquake in…

“We display risk-aversion when we are offered a choice in one setting and then turn into risk-seekers when we are offered the same choice in a different setting. We tend to ignore the common components of a problem and concentrate on each part in isolation.” – Peter Bernstein Let’s say you were given fifty-fifty odds…

Morningstar had an interesting piece out this week about the alternative mutual fund universe. While Morningstar studies have shown that the most dependable predictor of future fund performance is low expenses, investors in this universe of funds aren’t following that advice: From 2011 to 2013, only 36% of the net $58 billion that has flowed…

“Risk control is the best route to loss avoidance. Risk avoidance, on the other hand, is likely to lead to return avoidance as well.” – Howard Marks The investment fee wars continue to heat up as scale becomes more important than the actual size of the expenses. Here’s the latest from Investment News: TD Ameritrade…

“One lesson from 2008 is that if it’s very complicated and you don’t understand it, maybe you shouldn’t buy it.” – Harry Markowitz It appears some people didn’t learn their lesson from the CDO debacle of the last financial crisis. This comes from a story in last week’s Wall Street Journal on a new fixed…

“There are few corners of the investment business where reversion to the mean does not hold sway.” – Michael Mauboussin