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The Little Market that Could

October 20, 2017 Comments (0)

Picture Credit: Roadsidepictures from The Little Engine That Could By Watty Piper, Illustrated By George & Doris Hauman | That said, for every one that COULD, at least two COULDN’T======================================So what do you think of the market?  Why are both actual and implied volatility so low?  Why are the moves so small, but predominantly up?  Is this the closest impression of the Chinese Water Torture that a stock market can pull off?Why doesn’t the market care...

“Bank” Some of Your Gains

October 17, 2017 Comments (0)

Photo Credit: Scoobyfoo=======================Recently I read Jonathan Clements’ piece Enough Already.  The basic idea was to encourage older investors who have made gains in the risk assets, typically stocks, though it would apply to high yield bonds and other non-guaranteed investments that are highly correlated with stocks.  His pithy way of phrasing it is:If I have already won the game, why would I keep playing?His inspiration for the piece stems from a another piece by William...

The Many Virtues of Simplicity

October 8, 2017 Comments (0)

Photo Credit: Christopher || Maintaining a marriage is simple… if you do it right…==============There are at least eight reasons why taking a simple approach to investing is a wise thing to do.UnderstandableExplainableReduced “Too smart for you own good risk”Clearer risk managementLess tradingTaxes are likely easierNot TrendyCheapUnderstandableYou have to understand your investments, even if it’s just at the highest overview level.  If you don’t have that...

Book Review: The Best Investment Writing, Volume 1

October 5, 2017 Comments (0)

I was pleasantly surprised to be invited to contribute a chapter to this book.  I am going to encourage you to buy this book, but let me give some of the reasons not to buy this book:Don’t buy it to give me something.  I don’t get anything from sales of this book.  Neither does Mebane Faber, who is giving all of the profits to charity.Don’t buy it to read my article.  You can read it for free here.  Better, you can read the updated version of the article, which I publish...

Estimating Future Stock Returns, June 2017 Update

September 22, 2017 Comments (0)

I’d say this is getting boring, but it’s pretty fascinating watching the rally run.  Now, this is the seventh time I have done this quarterly analysis.  The first one was for December 2015.  Over that time period, the expected annualized 10-year return went like this, quarter by quarter: 6.10%, 6.74%, 6.30%, 6.01%, 5.02%, 4.79%, and 4.30%.  At the end of June 2017, the figure would have been 4.58%, but the rally since the end of the quarter shaves future returns down to 4.30%.We are...

How to Invest Carefully for Mom

September 21, 2017 Comments (0)

Photo Credit: stewit========Just a note before I begin. My piece called “Where Money Goes to Die” was an abnormal piece for me, and it received abnormal attention.  The responses came in many languages aside from English, including Spanish, Turkish and Russian.  It was interesting to note the level of distortion of my positions among those writing articles.  That was less true of writing responses here.My main point is this: if something either has no value or can’t be valued,...

Redacted Version of the September 2017 FOMC Statement

September 20, 2017 Comments (0)

July 2017September 2017CommentsInformation received since the Federal Open Market Committee met in June indicates that the labor market has continued to strengthen and that economic activity has been rising moderately so far this year.Information received since the Federal Open Market Committee met in July indicates that the labor market has continued to strengthen and that economic activity has been rising moderately so far this year.No change.  Feels like GDP is slowing, though.Job gains have...

Book Review: University of Berkshire Hathaway

September 8, 2017 Comments (0)

I feel like the skunk at the party here. I have no argument with the authors, per se. They came up with their concept and executed it adequately. No one else that I know of has done a book of their notes from Berkshire Hathaway annual meetings, in this case extending over 30 years.But the bar for writing Buffett books is low, because they sell so well.  Many marginal concepts get written about that aren’t as good as simply reading the writings of Buffett and Munger themselves.  This is...

Book Review: Big Money Thinks Small

September 6, 2017 Comments (0)

Joel Tillinghast, one of the best mutual fund managers, runs the money in Fidelity’s Low-Priced Stock Fund.  It has one of the best long-term records among stock funds over the 28 years that he has managed it.The author gives you a recipe for how to pick good stocks, but he doesn’t give you a machine that produces them.  In a style that is clever and discursive, he summarizes his main ideas at the beginning and end of the book, and explains the ideas in the middle of the book.  The...

Where Money Goes to Die

September 5, 2017 Comments (0)

Photo Credit: eFile989==============It is often a wise thing to look around and see where people are doing that is nuts.  Often it is obvious in advance.  In the past, the two most obvious were the dot-com bubble and the housing bubble.  Today, we have two unrelated pockets of nuttiness, neither of which is as big: cryptocurrencies and shorting volatility.I have often said that that lure of free money brings out the worst economic behavior in people.  That goes double when people see others who...