During the tech bubble in the late 1990’s, I had the feeling that seeing five years of 20 percent plus returns was a one in a lifetime type event and that was going to be it for me. Looking at the data today, that was a pretty good bet since there have only been a few times when the average return for five years has been greater than 20 percent. … Read More
Stocks were basically flat yesterday after Tuesday’s strong rally. Some smaller economic releases like the ADP private payrolls report and the ISM services data were softer than expected, but the news from the Fed’s ‘beige book’ was modestly positive. All of the reports included the negative impact of this winter’s cold weather.
Just as I enjoy and learn from Warren Buffets annual letter to Berkshire stockholders, I also read and get a lot of value from the annual report from Yale’s endowment. Here’s a link to the current report. Yale’s endowment is the largest in the world and has enjoyed spectacular investment performance, particularly under the stewardship of David Swensen, who wrote one of my favorite investing books of all time, Pioneering… Read More
Markets were a bit of a seesaw Friday and were up more than a percent in the mid day, but dropped back in the last hour of trading on the increasing tensions in the Ukraine. It was still a record close for the S&P 500. The second estimate of fourth quarter GDP was released in the morning and markets shrugged off the downward revision from the first estimate of 3.2… Read More
I’m a little embarrassed to admit that I’m not really following what’s happening in the Ukraine. I know that the people were unhappy, they protested, the President was ousted and Russia is involved. The only story that really caught my attention was that when they raided the President’s house, they found a palace, a golf course, a private zoo and, oddly, a replica of an old ship with a restaurant. … Read More
The same fine reader that asked about buy-side versus sell-side research asked another useful question about market valuation metrics. Let this be a signal to all readers that I demonstrate my appreciation for questions with answers! The question refers to an article by Mark Hulbert from CBS Market Watch that looks at six different valuation measures that all come to the same conclusion – that the market is overvalued. First… Read More
At the end of October, I wrote that investors could earn a tax-free nine percent yield on their fixed income portfolio buy purchasing bonds issued by Puerto Rico. In the article, I said that ‘markets caught on before the bond ratings agencies’ since prices had fallen dramatically while Moody’s had just cut their rating from Aa3 to A2, which is still five rungs above investment grade. A little more than… Read More
At the beginning of a client relationship, we ask new clients whether or not there are any constraints that we need to be bound by in managing the investment assets. Ninety-nine times out of a hundred, there’s nothing to worry about other than assets with a low cost basis and, therefore, a lot of potential capital gains taxes. In addition to any tax considerations, we want to know whether an… Read More
Stock markets fell and bonds rose sharply yesterday as the Federal Reserve continued to pull back on their quantitative easing program and tensions about emerging markets ramped up. The yield on the 10-year Treasury dropped eight basis points to 2.69 percent, falling all the way from 3.0 percent at the start of the year. Even though January isn’t even over, the Barclays US Aggregate bond index has regained almost three-quarters… Read More
Markets were lower yesterday across the board, but the feeling in the air, so to speak, was more calm, as evidenced by the four percent drop in the CBOE Volatility index. Granted, it was a four percent drop following a 40 percent increase last week, but the direction was right. Bonds fell, as measured by the 10-year US Treasury bond, as bond investors pulled away from the ‘flight-to-quality’ trade and… Read More
