The Irrelevant Investor

MARCH 31, 2016

If you want to lose weight, eat less and move more. If you want to make money in the stock market, cut your losses short and let your winners run. But neither losing weight nor making money is as simple as aphorisms make it seem. Not even Jesse Livermore, who is probably the most widely quoted trader of all time, was able to follow his own advice. This is from the excellent Jesse Livermore- Boy Plunger (emphasis mine): "It seems incredible that knowing the game as well as I did, and with an exp

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Brown Advisory

MARCH 1, 2016

The Advisory | March 2016 Insights on Markets and Investments. achen. Tue, 03/01/2016 - 11:37. So far in 2016, investors have encountered some of the worst market turbulence in many years. The key to weathering the volatility is staying true to a long-term investment plan. In this issue: Through the Storm. Stock market volatility has spiked in response to immediate market concerns about energy prices, weakening economic growth in China and changes to monetary policy, as well as momentous capital

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The Irrelevant Investor

MARCH 30, 2016

It's probably no surprise that the S&P 500 high quality index has outperformed the S&P 500. But what is surprising , to me anyway is that the S&P 500 low quality index has also outperformed the S&P 500 (as well as the high quality index!). How is this possible? It has everything to do with the structure of the index; interesting things happen once you break the link between size and weighting.

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The Irrelevant Investor

MARCH 25, 2016

The S&P 500 always gets the majority of the attention and understandably so, as these 500 504 stocks comprise ~80% of the total U.S. market cap. But something interesting recently happened in the Russell 2000, which represents just ~8% of the total U.S. market cap. The Russell 2000 has made no progress over the past thirty months. But in this thirty month period, it has experienced a 26.4% decline on a closing basis, certainly qualifying as a bear market.

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Speaker: Duke Heninger, Partner and Fractional CFO at Ampleo & Creator of CFO System

Are you ready to elevate your accounting processes for 2025? 🚀 Join us for an exclusive webinar led by Duke Heninger, a seasoned fractional CFO and CPA passionate about transforming back-office operations for finance teams. This session will cover critical best practices and process improvements tailored specifically for accounting professionals.

Accounting

The Irrelevant Investor

MARCH 24, 2016

Wouldn't you love to know how people actually invest. It's one thing to follow somebody on Twitter or to read their blog, but at the end of the day we have no way of knowing if that person actually practices what they preach. I want to lay my cards on the table, and share how I invest my money. First, I keep 6 months worth of living expenses in cash, you never know when the rainy days will come and I think this is a good rule of thumb.

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The Irrelevant Investor

MARCH 18, 2016

Emerging Markets have been a serial disappointment. Over the past five years they've been a money loser and were a huge opportunity cost relative to U.S. stocks. But alas, there is at least a glimmer of hope that things might be changing. Emerging Markets (EEM) have spent the last 184 days below the 200-day moving average. In that 184 day period, EEM experienced a decline of 29%.

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The Irrelevant Investor

MARCH 17, 2016

My first job out of college was with a life insurance financial planning company in Manhattan. At first it was a pretty seductive, high energy environment. Unfortunately reality reared its ugly head pretty quickly thereafter. I couldn't understand why life insurance was the right product for everybody, whether they were 30, 40, 50 or even 2. Yes, we were encouraged to sell whole life policies to grandparents; it was beyond gross.

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The Irrelevant Investor

MARCH 17, 2016

"The main purpose of the stock market is to make fools of as meny men as possible." -Bernard Baruch The other day I pointed out the unusual weakness out of small cap stocks. I also added the caveat that it was likely not indicative of anything, which is about as close to a prediction as I'll make in writing. [link] For the second time in four days, small caps are showing unusual movement relative to large caps, except today it is in the exact opposite direction.

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The Irrelevant Investor

MARCH 13, 2016

While many people have recently said it has never been a better time to be an investor, one can also make the case that it has never been as confusing. Between index funds and mutual funds, hedge funds and fund of hedge funds, ETFs and ETNs, financial advisors and robo advisors, there is an overwhelming amount of options out there for investors. Brian Portnoy's hits the nail on the head in his excellent book, The Investor's Paradox.

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Speaker: Abdi Ali, Sr. Lease Accounting Consultant

Join this insightful webinar with industry expert Abdi Ali, who will discuss the challenges that can arise from managing lease accounting with spreadsheets! He will share real-world examples of errors, compliance issues, and risks that may be present within your spreadsheets. Learn how these tools, while useful, can sometimes lead to inefficiencies that affect your time, resources, and peace of mind.

Accounting

The Irrelevant Investor

MARCH 11, 2016

Thinking and behaving for the long term is one of the most difficult challenges an investor is faced with. Although simply buying and holding has produced fabulous returns, this type of investing requires you to commit to several sizable drawdowns, likely to be over fifty percent in some cases, over the course of your investing career. For many, this is too steep a price to pay.

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The Irrelevant Investor

MARCH 9, 2016

"Patterns are the fool's gold of financial markets" Benoit Mandelbrot In 1976, a group of economists discovered that stocks tended to do well in January, small cap stocks in particular. Small cap stocks returned 26% in January of 1975 and an 18% in January of 1976, enough to get anybody's attention. This came to be known as the January effect, and like many other fundamental-less anomalies, shrunk upon its discovery.

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The Irrelevant Investor

MARCH 8, 2016

That depends on what you mean by "due." Are we due in the sense that it has been a while since the last recession? Sure. Since 1926, recessions have happened on average every 59 months. We're currently 80 months removed from the last recession. Are we due in the sense that stocks have gone too far? Sure. The S&P 500 has risen on average 111% in between recessions; currently stocks are up 142% since June 2009.

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The Irrelevant Investor

MARCH 6, 2016

"It is wise to take admissions of uncertainty seriously"- Daniel Kahneman Apple is the biggest and one of the most carefully watched stocks in the world. It's 50-day average volume is 49,069,563 shares, or roughly $4.8 billion a day. The buyer and the seller of every one of those shares believes they are receiving a good enough price which compels them to pull the trigger.

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Join us in this webinar, where we share best practices on how to think about the reconciliation work each month, when best to do reconciliations, how they should be prepared, and some common pitfalls to avoid. Learning Objectives: This course objective is to understand how to properly prepare and review balance sheet reconciliations and its impact on the financial statements.

Accounting

The Irrelevant Investor

MARCH 5, 2016

I want to share an amazing piece of history that I found in the New York Times archive from 1882. It pertains to Teddy Roosevelt, who in addition to being the youngest President of the United States, was also the youngest New York assemblyman. In one of Roosevelt's first acts as an assemblyman, he would take on the corrupt Jay Gould, as well as a judge and Gould's conspirator, Judge Westbrook.

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The Irrelevant Investor

MARCH 4, 2016

The only thing gold miners and biotech stocks have in common is their extreme performance over the past few years. While miners lost 76% of their value between 2011 and 2015, biotechs gained 241%. Below you'll see the 31-week rate of change of gold miners versus biotechs, which has spent most of the last few years deeply in the red. However, this ratio has jumped through the stratosphere, rocketing 144% in just the last 31 weeks.

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The Irrelevant Investor

MARCH 4, 2016

We've seen some explosive moves since the S&P 500 bottomed on January 20th. 241 S&P 500 stocks are up double digits, 29 stocks are up more than 20%, and 8 stocks are up more than 50%. Below is a further dissection of recent S&P 500 performance from the bottom. Here are the returns of the S&P 500 broken down by market cap, from largest to smallest.

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The Irrelevant Investor

MARCH 3, 2016

"There's a quick and easy way to test whether an activity involves skill; ask whether you can lose on purpose. In games of skill, it's clear that you can lose intentionally but when playing roulette or the lottery you can't lose on purpose." - Michael Mauboussin I don't believe that stock picking is entirely a game of luck, but the fact that there is a large amount of luck involved is indisputable.

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As we step into 2024, the lending landscape evolves rapidly with technology, regulations, and market dynamics driving change. For banks and financial institutions to stay competitive and meet the evolving needs of their customers, these drivers must be understood and engaged with. Lenders can anticipate significant transformation fueled by technological advancements, regulatory shifts, and changing consumer behaviors.

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The Irrelevant Investor

MARCH 1, 2016

A new paper was recently published titled The Market for Financial Adviser Misconduc t by Mark Egan, Gregor Matvos, and Amit Seru. It takes a deep dive into financial adviser shenanigans and quantifies everything from repeat offenders, to misconduct across firms, to the consequences of misconduct. This is a must read for anybody in the industry. Below I've clipped some of the data I found to be most interesting.

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The Irrelevant Investor

MARCH 1, 2016

Well that was a fun day. Let's get right into some of the data. 100% of large cap financials were positive, which has now happened twice over the last six days. XLF is up 11.6% from the lows made on February 11th. The transports, which were a major laggard all of 2015, are up 17.3% off their January 20th lows. All but two transports were positive today.

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Brown Advisory

MARCH 1, 2016

Through The Storm. achen. Tue, 03/01/2016 - 15:11. Stock market volatility has spiked in response to immediate market concerns about energy prices, weakening economic growth in China and changes to monetary policy, as well as momentous capital-market shifts during the past 20 years. In times like these, investors earn their stripes by staying focused on their long-term goals.

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Brown Advisory

MARCH 1, 2016

A Lift Amid Headwinds: The Appeal of Mortgage Bonds. achen. Tue, 03/01/2016 - 15:28. With the Federal Reserve tightening for the first time since 2006, investors may generate competitive returns from the comparatively stable market for mortgage-backed securities. "Know your borrower!”—a lesson from the subprime mortgage meltdown last decade—is now the key to achieving outperformance through investing in the even-keeled market for government-backed mortgage bonds.

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Speaker: Joe Buhrmann, MBA, CFP®, CLU®, ChFC® Senior Financial Planning Practice Management Consultant eMoney Advisor

During an era of evolving consumer preferences, the banking sector is undergoing a profound shift. As customers continue to broaden their perspectives, banking professionals must support their customers' financial wellness by providing holistic financial advice that aligns with individual goals and circumstances. Without adapting, financial institutions will find that loyalty may crumble amid uncertainty.

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Brown Advisory

MARCH 1, 2016

‘The Ultimate Mobile Device’: Redefining the Automobile. achen. Tue, 03/01/2016 - 15:52. For more than a century, automakers have provided a way to find adventure and new possibilities just beyond the horizon. Now the industry is also trying to satisfy consumers’ Web-focused wanderlust. Global automakers—latecomers to the digital highway—are now trying to hog its fast lane.

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Brown Advisory

MARCH 1, 2016

Present at the Creation: Early-Stage Venture Capital. achen. Tue, 03/01/2016 - 16:02. While headlines often focus on Uber, Airbnb and other private companies valued at more than $1 billion, we are looking beyond the so-called unicorns to find opportunities for bigger returns in early-stage venture capital. In 2011, a Tel Aviv-based startup called Cyvera began developing cybersecurity software deploying the coding equivalents of barriers and traps to thwart hackers staging potentially devastating

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Brown Advisory

MARCH 1, 2016

Back in Fashion: The Jackie Onassis Trust. achen. Tue, 03/01/2016 - 16:14. Jacqueline Kennedy Onassis structured her will with an approach toward charity and her heirs that, given the outlook for interest rates, is back in style. Through her will, former first lady Jacqueline Kennedy Onassis left behind a sizeable inheritance for her children while incorporating an innovative estate planning tool aimed at meeting her philanthropic goals.

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Brown Advisory

MARCH 31, 2016

Global Leaders Investment Letter - Q1 2016. ajackson. Thu, 03/31/2016 - 09:50. Global Leaders Strategy Investment Letter - Q1 2016. In their inaugural letter, the Global Leaders team shine some light on why they have a strong focus on customers and why high and sustainable ROIC is an important factor in their bottom-up analysis. . . Download the Letter. . .

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Speaker: Carolina Aponte - Owner and CEO, Caja Holdings LLC

In today's rapidly changing business environment, building a resilient balance sheet is crucial to the survival of any business. A resilient balance sheet allows a company to withstand financial shocks and adapt to changing market conditions. To achieve this, companies need to focus on key strategies such as maintaining adequate liquidity, managing debt levels, diversifying revenue streams, and prioritizing profitability over growth.

Financial Planning