22 Sep 2014

Alibaba vs. Amazon

Alibaba Group Holding (ticker: BABA) went public on Friday at a price of $68 per share, which valued the company at $168 billion, making it one of the 40 largest companies in the world, according to S&P Capital IQ. Once the stock started trading in the open market, however, investors bid the stock higher and it ended the day at almost $94 per share, valuing the company at $231.4 billion…. Read More

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14 May 2014

Dogs of the Dow

The first investment strategy that I can remember hearing about is the Dogs of the Dow strategy. One of my parent’s friends, who knew I was interested in stocks back in high school, told me one of the ‘secrets’ to beating the market. The strategy is fairly simply: start with the 30 stocks in the Dow Jones Industrial Average (DJIA) and sort them by their dividend yield.  Buy the 10… Read More

31 Mar 2014

Buybacks vs Dividends

When a company earns a profit, all accounting maneuvers aside, there is more cash in the till at the end of the year than there was in the beginning. Some of the money reinvested in the business in the form of capital expenditures (often called CAPEX), which refers to the purchase or upgrade of physical assets like property, buildings or equipment. When management has made all of their capital expenditures,… Read More

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11 Mar 2014

Which Stock Sector is Best?

A lot of our attention at Acropolis is focused on asset classes like US large or mid cap stocks, emerging markets or bonds.  We also spend a lot of time researching and trying to optimize strategies like value, momentum, size and quality. Another dimension that factors into our decision making process are stock sectors (bond sectors too, but I’ll save that for another day).  Within the S&P 500, there are… Read More

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5 Mar 2014

Acropolis vs the Yale Endowment

Just as I enjoy and learn from Warren Buffets annual letter to Berkshire stockholders, I also read and get a lot of value from the annual report from Yale’s endowment.  Here’s a link to the current report. Yale’s endowment is the largest in the world and has enjoyed spectacular investment performance, particularly under the stewardship of David Swensen, who wrote one of my favorite investing books of all time, Pioneering… Read More

12 Feb 2014

The Market is Over Valued. Now What?

The same fine reader that asked about buy-side versus sell-side research asked another useful question about market valuation metrics.  Let this be a signal to all readers that I demonstrate my appreciation for questions with answers! The question refers to an article by Mark Hulbert from CBS Market Watch that looks at six different valuation measures that all come to the same conclusion – that the market is overvalued. First… Read More

21 Jan 2014

Acropolis vs Harvard Endowment

I didn’t apply to Harvard because I was certain that they would not admit me. My grades were fine and scores were so-so, but at that time they were accepting only nine or ten percent of applications and I knew that the other kids had top grades and scores AND were fluent in four languages, captain of multiple teams and fought poverty on the side. Or, worse yet, their parents… Read More

17 Jan 2014

How We Use Past Performance

Yesterday’s insight about the Morningstar Manager of the Year generated a lot of interest and feedback from readers.  Thank you!  I appreciate your replies and make it a point to respond to all of them. While we’re on the subject, I also want to thank you for completing the satisfaction survey that we sent 10 days ago. I am pleased to report that when you were asked whether you would… Read More

16 Jan 2014

Morningstar’s Manager of the Year

Markets were higher today on upbeat earnings and manufacturing data.  The S&P 500 closed at an all time high and is now up 0.07 percent for the year!  Who knew such a little return could be so exciting. Much of the excitement about earnings came from Bank of America (BAC), which posted its highest annual profit since the financial crisis.  Back in 2007, when BAC had a market capitalization of… Read More

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