16 Jan 2024

Bitcoin: Coming to an ETF Near You

I first wrote about Bitcoin in 2017 and concluded that it probably wasn’t a good investment, but maybe my grandkids would be mad at me because I didn’t buy them a coin for $4,300. A little more than six years later, I’m a little mad at myself as the price is about ten times today. But I’m not actually mad because I don’t see it as a good investment, even though… Read More

27 Nov 2023

Fooling Yourself with Private Market Math

Private investments, or simply ‘privates’ in the current vernacular, are among the hottest investments in recent years. Private investments, which are often considered one of the most prominent alternative investments, means owning securities that aren’t publicly traded. Private markets can include equity (stocks), credit (bonds), and real estate. Each major group has subcategories. Private equity can be venture capital, buyout equity, or growth equity. Credit can mean direct loans, mezzanine… Read More

13 Nov 2023

30 Market Timing Signals that Worked

My subject line is taken from an article written by the PhD Head of Investment Research at Dimensional Fund Advisors (DFA), but I cheated and left out the second half of the sentence. Here’s their full headline: We Found 30 Timing Strategies that “Worked” and 690 that Didn’t. I guess I’m not above clickbait, but I also don’t have enough space to get the full headline into the subject line…. Read More

6 Nov 2023

Have Bonds Become More Volatile Than Stocks?

Before the big rally last week, a client asked me whether bonds had become more volatile than stocks. Although he was partially kidding, his point was right on: bonds have been volatile this year, especially in recent weeks. And the rally last week still adds to volatility, it’s just easier to stomach when prices are rising. To illustrate the rise on bond volatility, I calculate the 20-day rolling volatility of… Read More

11 Sep 2023

Stock Bond Correlation Changes Aren’t Concerning

Every investor suffered losses last year because the two most basic investment building blocks, stocks and bonds, both lost value. Many of the investment community’s intelligentsia are in a twist because the correlation between stocks and bonds is now positive for the first time in two decades. They say, full of sound and fury, that bonds offer less diversification now that the correlation is positive. My goal today, without getting… Read More

21 Aug 2023

What’s Happening in China?

One of the sources of optimism entering 2023 was that China was finally “reopening” after their long and agonizing Zero-Covid lockdown. Not only is the China-related optimism long gone, but markets are increasingly worried about the economic situation there. Although a lot of the news relates to a vastly overindebted property company whose bonds are trading for 35 cents on the dollar, the issues are much greater. First, growth is… Read More

7 Aug 2023

So You Say You Want Alpha: Cathy Woods has Some

Cathy Woods is a fascinating character. Her ARKK funds were the darlings of the pandemic, focused on innovation, and were on fire. Not surprisingly, investors poured money into the funds, just in time for them to collapse. The fact that investors piled in and out isn’t Woods fault. She bought a portfolio of stocks that she believed in and stuck to her style through the boom and the bust. Last… Read More

10 Jul 2023

Lessons from the Land of the Rising Sun

When I was in high school, Japan Inc. seemed invincible. Their economy was booming, which pushed up their real estate and stock markets, and a handful of over-the-top events like the purchase of Rockefeller Plaza by Japanese investors and the sale of Van Gogh’s Portrait of Doctor Cachet sold for $82.5 million (or $189.5 million in today’s dollars). From 1970-1989, the Japanese stock market, according to MSCI, gained 16.9 percent… Read More

26 Jun 2023

Decoding How the Mighty Greenback Shapes Your Investments

Last week, I was asked to consider writing an article about how the dollar’s strength or weakness impacts a portfolio. I’ve covered it a bit over the years, but I thought now would be a good time for an update, and I’m always interested in writing about what readers want to read about, so I try to address specific issues whenever possible. I will illustrate later how the dollar has… Read More

20 Jun 2023

The McNealy Problem

James Grant is one of my favorite market gadflies. He is the editor of the eponymous James Grant’s Interest Rate Observer, a columnist for Barron’s, and host of the Grant’s Current Yield podcast. Grant is intelligent, funny, and a long-term market skeptic. I’ve heard him say he doesn’t like being described as a perma-bear, but he’s been bearish for as long as I can remember and seems a true gold bug. So,… Read More