A great way to visualize asset class returns is to put them into what the industry calls a ‘periodic table,’ which I’ve done below. The basic idea is to order the returns of asset classes in each calendar year from best to worst. In the chart below, 2006 is the first year and the best performing asset class in gray was 35.9 percent. At the bottom of the column is… Read More
Stocks enjoyed a positive finish to a tough quarter, as the S&P 500 gained 1.91 percent yesterday but was still down -6.44 percent for the quarter. It was the worst quarter for most markets since 2011 during the first phase of the European debt crisis. Somewhat surprisingly, markets shook off weak purchasing manager data from Chicago and the onset of Russian airstrikes in Syria. Some investors believe that more stimulus… Read More
The selloff in stocks yesterday was a little different than what we’ve seen so far this month, both in terms of its magnitude, but also its suspected causes. Last month stocks sold off more sharply than they did yesterday, but things had quieted down a little bit, as you can see in the chart below. When stocks fell last month, the concerns were macro in nature: the slowdown in China,… Read More
The other day, Michael and I were talking about stocks based in St. Louis and I remembered that Bloomberg had created an index of St Louis stocks. When I loaded the track record on the screen, Michael and I were pretty impressed: St. Louis stocks have done extremely well! The chart below shows the growth of $1 invested in the Bloomberg St. Louis index compared to a $1 invested in… Read More
Part of what made last week’s market selloff particularly unsettling was the speed of the decline. So far this year, stocks had been relatively quiet. For example, the S&P 500 had stayed within a range of minus three percent back in January to plus four percent in July. Then, all of a sudden, stocks fell from the top of that range to the bottom over the course of four days… Read More
Warren Buffett wrote in Berkshire Hathaway’s 2010 annual report that they ‘will need both good performance from our current businesses and major acquisitions. We’re prepared. Our elephant gun has been reloaded, and my trigger finger is itchy.’ At that time, he was just coming off his largest deal ever, purchasing the railroad Burlington Northern Sante Fe for $26.7 billion in 2009. In 2013, it appeared that he had bagged his… Read More
As I wrote earlier this week, the plunge in oil prices has dramatically cut profits for energy firms (see the article here). Some of those companies have been using their excess cash over the last few years to buy back shares of their own stock, which reduces the number of shares outstanding held by investors. Last year, I looked at buybacks versus dividends (read the article here) and today I… Read More
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
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
