16 Sep 2015

The Secret Sauce Behind Value and Momentum

One of the interesting market developments so far this year is the relative performance of momentum versus value in large cap stocks. Earlier this year, I wrote a primer on each strategy (found here and here) and at the end of the momentum article, I pointed out that value and momentum work especially well together. While both strategies have enjoyed higher returns than the overall market, they do so at different times, which… Read More

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15 Sep 2015

A New Fed Plot Twist?

I thought I had heard every possible outcome of this week’s Fed meeting, but I heard an interesting new scenario yesterday from a bond specialist at the largest asset management firm in the world. Right now, we all say that interest rates are at zero and that the Fed is engaged in a ‘zero interest rate policy,’ or ZIRP.  That’s not quite true though, the fed funds target rate, as… Read More

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14 Sep 2015

St Louis Stocks Shine

The other day, Michael and I were talking about stocks based in St. Louis and I remembered that Bloomberg had created an index of St Louis stocks. When I loaded the track record on the screen, Michael and I were pretty impressed: St. Louis stocks have done extremely well!  The chart below shows the growth of $1 invested in the Bloomberg St. Louis index compared to a $1 invested in… Read More

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11 Sep 2015

Debt Ceiling, Here We Come (Again)

Earlier this week, Ryan Craft and I went to Washington DC for a full day of presentations put on by Macroeconomic Advisors. We heard from some of the country’s top economists, including the Director of the Congressional Budget Office (CBO) and the Chairman of the White House’s Council of Economic Advisors (who also happened to be Hollywood superstar Matt Damon’s freshman roommate at Harvard). While I plan to share some… Read More

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8 Sep 2015

California Pension Funds Intriguing Duel

One of the big stories inside the investment community over the past 18 months is the announcement by the California Public Employees Retirement System (CalPERS) that they are eliminating their hedge fund exposure and significantly cutting back their private equity exposure (which we wrote about here and here). These are two of the three asset classes that large institutions use that we don’t (the third being direct investment in commercial… Read More

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4 Sep 2015

Oil as an Inflation Hedge

Watching the bottom fall out for oil prices is really one of the most dramatic things that I’ve witnessed in several years.  Thankfully, it hasn’t had too much direct impact on us because we don’t have straight exposure to commodities, click here for the details on why we’ve avoided commodities). Of course, we’re all affected by the price drop.  The good news is easy to remember because I get a reminder every… Read More

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3 Sep 2015

The Chart That Made Me Laugh Out Loud

I think you know by now that I love charts.  I am definitely not saying that I am a chartist – I don’t think I have ever made an investment decision for me or anyone else based on a chart.  I simply think that if a picture tells a million words then a chart must at least tell 1,000 (roughly matching my wordcount) When I saw a blog titled ‘econompic,’… Read More

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2 Sep 2015

Downside Protection That Doesn’t Protect

After reading my article last week (that can be found here) that discussed how we use limit orders to protect us from wild price fluctuations (among other reasons), one of my favorite readers wanted to know why we don’t use stop-loss orders. A stop-loss order is different from a market order, which says ‘do my trade at any price’ and a limit order, which says ‘do my order at a… Read More

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1 Sep 2015

Deconstructing the Dow Jones Industrial Average

In last week’s market turbulence when the Dow Jones Industrial Average (DJIA) fell by 1,100 points in a single day, I had to talk about something that I don’t like talking about: the DJIA itself. For the most part, I’m able to avoid talking about the DJIA, which is nice, because I think the index is pretty much an almost worthless relic of history. That said, when markets are volatile and… Read More

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31 Aug 2015

Stocks and the Real Economy

One of the interesting comments that I read in the early part of last week when markets were falling was that financial markets were doing poorly while the real economy was doing reasonably well. Over the last five years, I’ve heard people say countless times that we’ve had a nice recovery in financial assets while the real economy has sputtered along at growth rates well below our historical long-term trend… Read More

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