7 Mar 2016

Employment Data Supports Stocks

Payrolls rose 242,000 last month versus consensus estimates of 195,000 and an upwardly revised 172,000 reading from January. The unemployment rate held steady at 4.9 percent while the U6 unemployment measure that includes workers who are part time purely for economic reasons, dropped to 9.7 percent – the low for this cycle. Average hourly earnings declined -0.1 percent versus expectations for a positive print of 0.2 percent.  On a year-over-year… Read More

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2 Mar 2016

Performance Transparency

We have another special posting from Michael Lissner today, who will be writing Daily Insights more regularly.  Also, there was a large typo yesterday, which said that we had traded $223.2 billion worth of stocks and ETFs.  Far from it: we traded $223.2 million in stocks and ETFs, which is still a lot, but less than what I wrote, which makes more sense given our $1.2 billion in assets under management…. Read More

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1 Mar 2016

The Inside Story on Trading Costs

Some things are easy to measure, like the internal costs of a mutual fund or exchange traded fund (ETF) or how much we spend in commissions at our custodian to buy or sell stocks, bonds, mutual funds and ETFs. It’s much harder to measure the market impact of your trading, or how much you pay as a price-taker (like us) between the price to buy a security (the offer) and how… Read More

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29 Feb 2016

Applied Investment Rigor

Barron’s cover article this weekend featured AQR, one of the fund companies that we use.  You can find the article here, but a subscription is required. The article was great, really explaining the firm and many of their processes – so much so that one of the online commenters asked, ‘what is this, an ad?’ My only disappointment was that the article really highlighted their alternative mutual funds, strategies like managed futures… Read More

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26 Feb 2016

Is Value Investing Dead?

Value stocks are undoubtedly having a tough time these days.  As I first wrote last November (click here for the article), value stocks are undergoing their worst period of underperformance since the tech bubble during the late 1990s. For the 10 years ending January 31st, the Russell 1000 Value index is up 7.03 percent compared to 7.92 percent for the Russell 1000 index of large cap stocks and 8.68 percent… Read More

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25 Feb 2016

Another Year of the Bump

When I first took over Daily Insights, I wrote an article entitled ‘The Year of the Bump,’ which was about several of the Acropolitans that were having kids that year.  Unfortunately, I wrote that article before our current website, so it isn’t online, but I thought about that in a meeting today. We were visited by representatives from Dimensional Fund Advisors (DFA) and our primary contact said that he and… Read More

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24 Feb 2016

An Unusual Energy IPO

I’ll bet that when you think of IPOs, or initial public offerings, you think of hot tech stocks like Facebook, Tesla or GoPro (granted, some of these stocks are a little less hot these days). I do too, so I was a little surprised to read in the Wall Street Journal that the biggest IPO this year is essentially a blank check for what is known as a Special Purpose… Read More

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16 Feb 2016

Fed Policy: From ZIRP to NIRP?

In the third quarter last year, I wrote at least two articles that used the acronym ZIRP, which stands for ‘zero interest rate policy.’  At the time, all of the conversation was about how the Fed was ending ZIRP with their first interest rate hike in seven years. Today is the two-month anniversary of the hike and the discussion has moved from ZIRP to NIRP, which stands for ‘negative interest… Read More

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10 Feb 2016

Predictions are Really, Really Hard

Nearly as soon as we sent out yesterday’s Daily Insights where I said that the banking system is far less leveraged today than it was in 2008 (click here for the article), I saw this article in the New York Times: ‘As Worries Mount, European Banks Face Sell-Off More Savage Than 2008’ (click here for the article, though a subscription may be required). The article says that European banks are… Read More

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9 Feb 2016

Why This Isn’t Another 2008

In December of 2008, I went to a new client meeting and made a call: ‘I don’t think we are in a second Great Depression.’ With the benefit of hindsight, that doesn’t seem like much of a prediction, because we know after the fact that gross domestic product (GDP) only fell -4.3 percent during the 2008 global financial crisis, which is small compared to the estimated -15.0 percent decline in… Read More

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