Insider Trading Made Easy

30 Dec 2014

Just before the 2008 financial crisis, a Wall Street insider tipped off the Securities and Exchange Commission (SEC) to insider trading at a large, successful, but largely little known hedge fund, the Galleon Group. The founder, Raj Rajaratnam, had a vast network of contacts that he would pay in exchange for confidential information about a company that would affect its stock price when the information became public. Ultimately, he was… Read More

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Beating the Index

29 Dec 2014

One of the complaints that I hear about index funds is that their returns are average and buying them guarantees mediocre returns. Not so! If that were true, you would expect that the returns for the Vanguard S&P 500 index fund (VFINX) would be around the 50th percentile when measured against its peer group. The actual percentile might shift around some from year-to-year, in the 40th percentile one year and… Read More

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The Allure of Market Timing

19 Dec 2014

The performance of the S&P 500 over the past two days has reminded me of charts that I have seen over the years that show the impact of missing the best days in the market. These charts offer a good message about remaining fully invested, which I wholly agree with, but the charts are also a little misleading in my view.  I decided to create one of my own to… Read More

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Portfolio Construction: Get Your Yellow Hard Hat On

12 Dec 2014

Sometimes I inadvertently slip into financial jargon that is meant to convey a very specific message but ends up being gobbledygook that is off-putting for a lot of people. Recently, I used the term ‘portfolio construction’ in a meeting and the client, understandably said, ‘Dave, I know you mean how it’s built, but what exactly are you talking about?’ It’s true, the term portfolio construction sounds obvious but isn’t necessarily…. Read More

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Tony Robbins: From Life Guru to Markets Master

11 Dec 2014

Growing up, I watched get-rich-quick infomercials, from selling vitamins through tiny classified ads in thousands of newspapers ($50,000 per week!) to flipping real estate (buy a home with nothing down and walk away from the closing with a $30,000 check!). Although Tony Robbins didn’t sell get-rich-quick schemes, he sold something even more enticing: how to unleash the power already within you to live an extraordinary life – achieving your ultimate… Read More

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Forecasting Oil Prices

09 Dec 2014

After falling interest rates, the biggest surprise of 2014 is the dramatic selloff in oil prices. One of the great things about having a Bloomberg Terminal, is that you can go back in time and look at forecasts as of some date in the past. So, I entered my time traveling machine to see what the professional forecasters had to say about what oil prices might do in 2014. Spoiler… Read More

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Jim Cramer Gets Burned in Lightening Round

08 Dec 2014

I love Wall Street soap operas. I’ve written about Bill Gross’ departure from PIMCO two times (here and here) and, for me, it’s the gift that keeps on giving. There was another long exposé on Bloomberg yesterday but I decided not to write about it hoping that you aren’t afflicted by the schadenfreude that sometimes gets me. Yesterday, it was reported that an activist investor is going after Jim Cramer,… Read More

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Perpetual Income

04 Dec 2014

The question about when interest rates will rise has been a big question around here for several years, and we still don’t know. Most investors are worried about rising interest rates and most people, including me, have been very surprised this year to see the yield on the 10-year US Treasury note fall from 3.00 percent to 2.29 percent, as of yesterday. The direction of interest rates matters when you… Read More

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Using Donor Advised Funds

02 Dec 2014

After shopping-centric Black Friday and Cyber Monday, it’s refreshing to know that today is Giving Tuesday. Giving Tuesday is actually a relatively new effort – the first one was in 2012 and it is actually part of November’s nonprofit awareness month. But giving in the US is not new at all. In fact, the US is one of the most generous countries on earth. Here are some of the facts… Read More

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