Posts filed under “Investing”

10 Insane Things We Believe On Wall Street

To outsiders, Wall Street is a manic, dangerous and ridiculous republic unto itself – a sort of bizarro world where nothing adds up and common sense is virtually inapplicable.

Consider the following insane things that we believe on Wall Street, that make no sense whatsoever in the real world:

1. Falling gas and home heating prices are a bad thing

2. Layoffs are great news, the more the better

3. Billionaires from Greenwich, CT can understand the customers of JC Penney, Olive Garden, K-Mart and Sears

4. A company is plagued by the fact that it holds over $100 billion in cash

5. Some companies have to earn a specific profit – to the penny – every quarter but others shouldn’t dare even think about profits

6. Wars, weather, fashion trends and elections can be reliably predicted

7. It’s reasonable for the value of a business to fluctuate by 5 to 10 percent within every eight hour period

8. It’s possible to guess the amount of people who will get or lose a job each month in a nation of 300 million

9. The person who leads a company is worth 400 times more than the average person who works there

10. A company selling 10 million cars a year is worth $50 billion, but another company selling 40,000 cars a year is worth $30 billion because its growing faster

Away from Wall Street, no one believes in any of this stuff. It’s inconceivable. On Wall Street, these are core tenets of our collective philosophy.

No wonder everyone else thinks we’re insane.

Category: Corporate Management, Investing, Philosophy, Really, really bad calls

No, EVERYTHING Is NOT A Forecast

As one of those folks who has spent a lot of time bashing economic and stock-market forecasters (see this, this, and this), I have no choice but to take issue with an argument made by former hedge-fund manager Jesse Felder, who asserts “that everything is a forecast.” To quote Felder: Can we please stop bashing forecasters already? There is a…Read More

Category: Asset Allocation, Bad Math, Investing, Mathematics

The Amazing Disconnect Between Hedge Fund Performance & AUM

Earlier this week, Greg Zuckerman of the Wall Street Journal pointed out one of the great mysteries of today’s investment landscape: Despite underperforming by a substantial margin, hedge funds keep attracting more investors and assets under management. It is almost as if (to borrow the headline on Zuckerman’s article), “Hedge Funds Keep Winning Despite Losing.”…Read More

Category: Asset Allocation, Bad Math, Hedge Funds, Investing, Psychology

The Future of New Business is Disrupting Old Business

The future of new business is disrupting old businessBarry RitholtzWashington Post, February 1 2015        There are many lessons to be learned from Uber, the taxi- ­ and car-hailing start-up that came out of nowhere and is valued at $41 billion. Less than three years ago, Uber had zero drivers. Now it has more than…Read More

Category: Investing, Technology, Venture Capital

A. Gary Shilling’s INSIGHT 2015 Investment Themes

INSIGHT 2015 Investment Themes A. Gary Shilling January 28, 2015     Our 2015 investment themes are quite similar to our 2014 list that worked well for us. If it ain’t broke, don’t fix it. The Treasury “bond rally of a lifetime” still seems intact. The “risk on” investment climate for U.S. equities persists, but…Read More

Category: Currency, Investing

How Passive Funds Changed Investing

Fantastic explanatory from the FT on the history of passive investing:   click for ginormous infographic Source: FT

Category: Digital Media, Index/ETFs, Investing

Drawdowns in S&P 500 Since March 9, 2009

Source: A Dash of Insight

Category: Data Analysis, Investing, Quantitative

Don’t Play Probalities Like the Seahawks in Investing

Last week, I was in Seattle for an event sponsored by the CFA Institute. The trip was booked long before any of us knew the Seahawks were going to defend their championship title in Super Bowl XLIX. Following the Seahawks’ amazing comeback in the NFC Championship versus the Green Bay Packers on Jan. 18, the city…Read More

Category: Bad Math, Investing, Really, really bad calls, Sports

Can Janet Yellen really help you with your investing?

Source: Yahoo Finance

Category: Federal Reserve, Investing, Media

John Bogle’s Investing Genius Needs An Update

Now before I commit blasphemy, a few words: I am as close to being a Boglehead as you will find, without actually being one. The bulk of my portfolio is in passive indexes. Most of the assets I manage are in a broad allocation model. This is a tribute to the wisdom and teachings of investing…Read More

Category: Apprenticed Investor, Asset Allocation, ETFs, Investing