8 Mar 2021

Investing for Inflation

Last week, I looked at some of the investor concerns about inflation, noting that inflation expectations had jumped recently (you can read the full article here). As the economy comes out of the covid-induced recession, the government is still responding aggressively, which has some investors concerned that there will be too much money chasing too few goods, leading to higher prices. This week, I promised to describe some of the… Read More

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22 Apr 2020

Dodging Commodities

One of the best decisions that our Investment Committee made was back in 2008 when we decided not to add commodities to the portfolio. It’s hard to believe now, but there was a lot of pressure back then to add it because stocks were down and commodities were doing well. If you look at the 12-month period ending on June 30, 2008 just before the worst part of the storm,… Read More

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22 Apr 2019

The Secret to Yale’s Success

I’ve written about David Swensen and the Yale Endowment several times over the years (here and here, for example) because i find both fascinating. I first learned about Swensen in 2005, when he was heralded ‘Yale’s $8 Billion Man’ upon the 20th anniversary of taking over the endowment.  The performance during that period was remarkable: 16.1 percent versus the S&P 500, which earned 11.9 percent during the same time frame. … Read More

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25 Feb 2019

When Warren Buffett Speaks, I Listen

Every year, the investors and the financial media eagerly await Warren Buffett’s annual letter to shareholders, and this year was no exception. I didn’t start reading them until four or five years ago, although I once read book that reorganized his letters by topic rather than chronology.  Each year, I like to think that I’ll go back and read his letters, which can be found here, on Berkshire’s hilariously antiquated website – but I… Read More

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11 Feb 2019

Why Bother with International Stocks?

According to data from Dimensional Fund Advisors (DFA), the value of the US stock market at year-end was worth $28.1 trillion – about 55 percent of the market value for all of the world’s stocks, which totals $51.2 trillion. Developed international stocks are worth $17.4 trillion in aggregate (34.0 percent), and emerging markets stocks are worth $5.7 trillion (11.0 percent). In theory, passive investors should allocate their portfolio accordingly. In… Read More

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17 Dec 2018

What’s Driving the Market Lower?

Stocks are suffering for two basic reasons: slowing global growth and tightening central bank policy.  While both of these rationales are true, they’re also very generic. Therefore, I thought it would be interesting to look at the big sectors driving the market performance and try to describe what’s happening in each one for a little more granularity. There are 11 sectors, and I won’t be discussing all of them, because… Read More

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29 Oct 2018

Stocks Enter Correction

A correction is usually defined as a peak-to-trough decline of 10- percent using closing prices.  Under that definition, we’re not quite at a correction, since the S&P 500 is ‘only’ down -9.28 percent since the recent high on September 20th. I think that such a strict definition is a little bit silly, so I’m calling it a correction since we’re very close using closing prices, and we crossed the 10-percent… Read More

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8 Oct 2018

What Ever Happened to Bitcoin, Anyway?

Around this time last year and in the months to follow, you’d be hard pressed to find a news site, especially in the financial realm, that did not have an article about bitcoin or some other form of crypto currency or blockchain. Today, you’ll still see an article here or there, but by in large, the hype has subsided. As we approach the 10-year anniversary of the publishing of bitcoin’s… Read More

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17 Sep 2018

Remembering Lehman Brothers: What Have We Learned?

Five years ago, at the five-year anniversary weekend remembering the collapse of Lehman Brothers, I wasn’t ready to deal with the bad memories of that terrible time. Granted, what happened 10-years ago in financial markets was not like being in a war, a natural disaster, sick with a terrible disease or the victim of a terrible crime, but it was still upsetting to me (no doubt because I live in… Read More

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23 Apr 2018

Retelling the Story of Concentration Risk

My wife and I were both very fortunate to have inherited some money. When we got married, almost 19 years ago, we found out that about 10 percent of our combined net worth was in General Electric (GE) stock. It was the largest position for both of us, actually. I received the stock when my grandfather died, which was right around the time that Jack Welch took over as the… Read More

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