After a summer of historically low and realized volatility in the market, we finally saw a sharp spike in volatility as tensions rose between North Korea and the US last week. While the exact cause and timing behind the volatility could not have been predicted, we did know that the low levels of volatility would not continue forever. Whether or not volatility is back for a while, it is always… Read More
While it’s always unclear what will come out of Washington, it appears that the inherited IRA (also known as a ‘stretch’ IRA) may be on the chopping block. To incentivize retirement saving, the government allows people to make pretax contributions to IRAs and allows the funds to grow without annual tax bills. Ultimately, though, IRAs are tax-deferred, as opposed to tax-free and the government taxes the money when it comes… Read More
Last weekend, I took an extended drive through the Great Lakes region to drop my kids off at their respective camps. We stayed in Michigan the first two nights – first in Holland and then Munising, right on Lake Superior in the Upper Peninsula. After a drop off in Minocqua, Wisconsin, we stayed in downtown Madison. All told, we traveled about 2,300 miles. While my wife and kids were hooked… Read More
I suspect that, at some point, everyone has heard the old rule of thumb that retirees need to replace 80 percent of their income in retirement to continue to maintain their lifestyle. Although I think that the rule is conceptually reasonable, it’s imperfect and can be improved upon. At the very least, spending in retirement isn’t fixed – it tends to decline over time as people age (for more on… Read More
Precision in language matters, though you wouldn’t know it from reading newspaper headlines (Gator Attacks Puzzle Experts). It may seem like distinction without a difference, but I want to make a distinction today between passively managed funds and index funds. One of the biggest debates amongst investors is the old ‘active/passive’ debate. I’ve spilled plenty of digital ink on this subject already (click here, here and here), but the basic… Read More
Quick – name the country with the second largest stock market in the world! Obviously, we know that the US has the largest stock market in the world. But did you guess Japan, Great Britain or France? Those are good guesses since they are the three largest developed markets in the world. Maybe you guess China, which is the fourth largest market in the world as measured by the weight… Read More
Almost a year ago, the yield on the 10-year US Treasury hit an all-time low, falling to 1.36 percent, just below the previous all-time low of 1.39 percent, set in 2012. After the yield on the 10-year bottomed last summer, the yield drifted slowly higher until the election when, boom, it shot dramatically higher overnight. Investors were optimistic that the Trump administration might bring faster economic growth through a combination of… Read More
Yesterday, the Wall Street Journal (WSJ) printed four articles in what appears to be a 17 article series on what they call ‘the quants.’ I was so excited to see these articles because I think you could fairly describe some of the strategies that we pursue as quantitative in nature. Unfortunately, I was turned off immediately. The second paragraph of the first article talked about how the quants use ‘high… Read More
Last week was particularly tough on retailers thanks to a report that showed online spending increased 1.4 percent while it declined -0.50 percent for brick and mortar stores. Department stores like Nordstrom’s and JC Penny both fell more than -10 percent on earnings and forward guidance news. Even though we don’t own either of these two retailers, we own others and the bad news made its way into the stocks… Read More
This past weekend was the ‘Woodstock for Capitalists,’ otherwise known as the Berkshire Hathaway annual meeting, where each year, tens of thousands of shareholders descend on Omaha, Nebraska to hear from the Oracle of Omaha, Warren Buffett. I’ve never attended myself, but I’ve read the book and watched the documentary (a trailer can be seen here). Before Airbnb, it was next to impossible to find a place to stay and… Read More
