3
Nov
2015
Value Stocks Don’t Party Like it’s 1999
I haven’t seen or read much about it, but this is a very tough time for value investors. In fact, to my surprise, it hasn’t been this bad for value investors since the late 1990s tech bubble. Although you can find the same thing if you look at commercial indexes from companies like S&P, Russell and MSCI, the following data from academic Ken French tells the whole story. While useful,… Read More
2
Nov
2015
Rocktober in Three Charts
The teacher from The Simpsons would have you believe that there is no such month as Rocktober, but looking at the returns from last month, I have to disagree! Stocks have recovered all of their losses from the August/September correction, are now positive for the year and within a few percent of the all time highs set in May. You can see that the nervousness that struck markets sharply in… Read More
30
Oct
2015
New Budget Curtails Social Security Maximization Strategies
It was announced on Tuesday that the House of Representatives passed a budget deal that is expected to move through the Senate largely unchanged and make it to the President’s desk in time to avoid a fiscal crisis and a possible government shut down. Although that’s news unto itself, I was interested to see that this budget clamps down on two of the most popular Social Security maximizing strategies in… Read More
29
Oct
2015
Fed Wake Up Call: December is on the Table
While the Fed kept interest rates at zero as expected, they did send two notable signals for investors to think about. First, they removed the language that first appeared in the last statement, which said that ‘recent global economic and financial developments may restrain economic activity somewhat and are likely to put further downward pressure on inflation in the near term.’ While they said that they will be monitoring global… Read More
27
Oct
2015
Efficient Markets: Fact and Fiction
For almost 50 years, one of the most controversial ideas in finance is that markets are efficient as presented by Gene Fama’s Efficient Market Hypothesis (EMH) in 1966. Let’s start with a simple definition of EMH: Current market prices incorporate all available information and expectations and are the best approximation of intrinsic value. In some ways, it’s such a simple statement that it’s a little surprising that it’s so controversial…. Read More
26
Oct
2015
Jack Bogle Doesn’t ‘Do” International Investing
Jack Bogle, the founder of Vanguard, is one of my heroes. Earlier this year, there was a petition to award him the Presidential Medal of Freedom (that I asked you to sign) and he wasn’t even close to getting enough signatures for the President to consider the petition. I was both surprised and disappointed. I’ve read several of his books and whenever I see him interviewed, I pay attention. A… Read More
22
Oct
2015
Profits Are Falling (Again)
Someone once told me that the price of a stock should only change four times per year – when investors receive new financial information about the business in the form of an earnings release. Obviously, it doesn’t work like that, but it’s an interesting idea. In any case, earnings season is upon us and based on the third quarter data so far from FactSet, it doesn’t look pretty. While only… Read More
20
Oct
2015
I’ve Got an Embarrassing Admission
In September, I wrote an article about the Dow Jones Industrial Average (DJIA) – how it was constructed, how it compares to the S&P 500 and why I think, to quote myself, ‘that it’s an almost worthless relic of history.’ A few readers emailed me to say that while they agreed that the DJIA is a funny index with its price-weighted construction and limited number of stocks, its performance roughly… Read More
19
Oct
2015
Deflation in Switzerland
Back in January, I wrote about how some economists were arguing that a little deflation might not be such a bad thing (you can refresh your memory here). Deflation, or falling prices (negative inflation), is widely feared by economists because falling prices lead to lower consumer spending, which is a major component of economic growth. Producers respond by slowing down their factories, which leads to layoffs and wage reductions that… Read More
15
Oct
2015
Portfolio Insights
We are pleased to provide a digital copy of Portfolio Insights, our quarterly newsletter. Table of Contents: The Correction In Perspective The Importance of Discipline Information Security Today New at Acropolis Janet Blinked Click here to read this issue: 2015 Q3 Portfolio Insights