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
It’s that time of year when another batch of kids finishes school and begins working. Old folks like me will offer plenty of advice knowing that most of what we say will be a little lost on these fine young people, just as it was on us when we were their age. You never know, though, good counsel today might get re-tweeted and go viral. My advice is simple: buy… Read More
Warren Buffett is the master. There was never any real doubt about that in my mind, but the Heinz/Kraft deal that was announced yesterday is another reminder that the Oracle of Omaha hasn’t lost his touch. Over the past few years, Buffett has been on a buying spree, probably to help set the course for Berkshire Hathaway in the coming decades knowing that he might not be around to steer… Read More
