Yearly Archives: 2014

Alts: Like a Box of Chocolates

So news is circulating today about one the largest liquid alternative investments and its absolutely rotten year.   According to the fund’s website, Good Harbor financial’s Tactical Core US A (GHUAX) is a long-only (no short selling any stocks) US large cap strategy benchmarked to the S&P 500.  They even go so far to say […]

Posted in fees, investing | Comments closed

What readers liked most in 2014

(Everybody else is doing it, so here’s my list of most-read posts in 2014) 1) Hate something (or a few things) in your portfolio? Why Diversification Sucks. 2) While being a “passive” investor is better for you, even “Passive” investors have to make “Active” decisions 3) There’s always a great reason not to be invested in […]

Posted in behavioral finance, investing, markets | Leave a comment

3 Things I Learned in 2014

(Yes, I am absolutely stealing this idea from Cullen.  Go read his, it’s great.) 1) Many (but not all) roads lead to Rome. “We” in the investment business like to discuss and debate the finer points of factor models and small/value tilts and tax loss harvesting and rebalancing strategies and global allocation and treatment of […]

Posted in behavioral finance, investing, markets | Comments closed

The magic of self-correcting markets

I love studying markets. They fascinate me. Not just the stock market – all economic markets, from garage sales to global commodities. Markets provide the opportunity to observe the combination of finance and human behavior (rational and irrational alike) like nowhere else.  And every year (almost every day) we get some opportunity to watch market reactions […]

Posted in economy, markets | Comments closed

WSJ On Investors’ Self-Sabotage

I had a good chat with Morgan Housel at the Wall Street Journal about how easy it is for investors to sabotage their own portfolios due to our behavioral tendencies: James Osborne, president of Bason Asset Management in Lakewood, Colo., recently met with a new client who benefited handsomely from the nearly six-year upward run […]

Posted in behavioral finance, investing | Comments closed

Is there such as thing as “intrinsic value?”

I’ve been re-reading Howard Marks’ The Most Important Thing (which is excellent, of course) and an assumption he frequently relies on is the idea of “intrinsic value.” Marks is a portfolio manager and founder of Oaktree Capital Management.  He has a Warren Buffet/Ben Graham-esqe value style of investing. Popular among bottom-up value fund managers, the basic […]

Posted in behavioral finance, investing | Comments closed

Bubbles: A View From the Outside

We humans have been driving bubbles in assets of every stripe for generations.  From tulip bulbs to tech stocks to beanie babies and bitcoins, our potential for irrational speculation has no end.  If we are lucky, we avoid these traps, but that can be harder than it sounds. In the last five years we have […]

Posted in behavioral finance, investing | Leave a comment

How to Write your 2015 Market Forecast

1) Start with your S&P 500 price target. This one is easy, just assume that the market will go up the same as the historical average return, 9-10% (even though this basically never happens in any given calendar year). 2) Find out what everybody else is saying about interest rates. They have to go up, […]

Posted in behavioral finance, economy, markets | Comments closed

Yes, I actually read (most of) Tony Robbins’ new book

In case you aren’t obsessively plugged in to the financial web/Twitter/blogosphere, mega self-help guru Tony Robbins has a new book out on finance and investing, “MONEY Master The Game.” (I’m not going to link to Amazon because I don’t want you to buy it.  But we’ll get to that.)  Everyone has been abuzz this week […]

Posted in behavioral finance, investing, retirement, taxes | Comments closed

The Wall of Worry, Illustrated

“The market climbs a wall of worry.”  You’ve heard it hundreds of times.  It sticks around  because it’s true.  And we know it is true, at some level.  But it is always in the moments of true worry that we want to discount this (and all other) time-hardened wisdom. Because we will forget, here’s what […]

Posted in behavioral finance, investing, markets | Comments closed

“Bucketing” Your Retirement Income – A Valid Approach?

The single biggest concern for retirees and the financially independent is how to ensure that they do not outlive their assets.  Endless studies have been made on safe withdrawal rates, including those originating the “4% rule.”  Fears over long-term income shortfalls are why insurance salesman pushing complex, expensive “guaranteed lifetime income” variable annuities have so […]

Posted in behavioral finance, investing, retirement | Comments closed

Precisely Wrong

The best lack all conviction, while the worstAre full of passionate intensity. – William Butler Yeats The Second Coming Everybody loves an expert. Well researched studies have proven that people are inclined to believe pundits who appear the most confident and make the most specific predictions and ignore those who address nuance and probability and complex […]

Posted in behavioral finance, investing | Leave a comment