Yesterday, one my favorite long-time clients and Daily Insights readers emailed and asked whether we had ever looked into the old saying, ‘Sell in May and stay away!’ As it happens, I did do a write up on this topic last May, but we have a new website since then and for reasons that I don’t know, that article didn’t make it onto the new site. So, it was a… Read More
When people ask me how long their time horizon ought to be when investing in stocks, I usually say 10 years. It occurred to me the other day that either I’ve never really looked into this in a very detailed way or I’ve forgotten about it. In either case, it’s now time to look. To answer this question, I looked at rolling returns for the S&P 500 since 1926 for… Read More
Long-term interest rates have moved up swiftly in recent weeks. On April 20th, the 10-year German government bond had a yield of 0.06 percent. Around that time, I couldn’t stop writing about negative interest rates (see here and here) because the 10-year Swiss government bond yielded -0.13 percent along with the government bonds of a half-dozen other European countries at shorter maturities. I read at one point that one-third of all outstanding… Read More
There is no doubt that the current bull market is remarkable. Yes, it’s true that this bull market was born in a panic and the first three or four years the market was simply getting back to even from the pre-crisis peak. Since we broke even back in August of 2012, the S&P 500 is up almost 60 percent, which is just a little more than 18 percent per annum. … Read More
When the Communist People’s Republic of China (PRC) took control of China in 1949, all privately owned assets were expropriated by the government and what were once vibrant capital markets went dark until December, 1990 when eight companies started to trade publicly on the Shanghai Stock Exchange. Now, as I wrote in April, the mainland Chinese stock markets are red hot and many people believe they are in the middle of… Read More
As noted in yesterday’s Daily Insights, Gross Domestic Product (GDP) in the first quarter was pretty bad – we actually contracted at an annualized rate of -0.7 percent. As bad as that is (and it’s pretty bad), it’s actually better than the first quarter of last year, which saw an annualized contraction of -2.1 percent. Last year, we could blame the drop in output on the polar vortex that made… Read More
Not too long ago, someone sent me an advertisement for an exchange-traded fund (ETF) that tracks the global airline industry. The ticker for the ETF is very cute: JETS. Personally, I think an index that tracks the airlines industry is nuts. Although it can’t be attributed to anyone specifically, it’s been said that the airline industry, in its entire history, has never made any money. I don’t have the data… Read More
For a few years now, I’ve been pondering why academics always evaluate the cheapness or expensiveness of stocks based on the price-to-book (PB) measure. Even more oddly, they call it book-to-market, but that’s a mystery that won’t be solved. In case it’s been a while since you’ve had an accounting class, the book value of a company is equal to the assets minus the liabilities, or equity of a company…. Read More
It’s that time of year when another batch of kids finishes school and begins working. Old folks like me will offer plenty of advice knowing that most of what we say will be a little lost on these fine young people, just as it was on us when we were their age. You never know, though, good counsel today might get re-tweeted and go viral. My advice is simple: buy… Read More
In recent months, I’ve been working to create a set of ‘primers’ that describe certain market factors that we pursue in our strategy in hopes of increasing returns, lower risk, or, in a perfect world, doing both. So far, we’ve looked at three equity factors: size (small companies tend to outperform large companies), value (cheap companies tend to outperform expensive companies) and momentum (stocks that have recently outperformed/underperformed are likely… Read More
