The Irrelevant Investor
SEPTEMBER 25, 2015
One of my favorite investing books ever is The Money Game , by Adam Smith. This book absolutely nails Wall Street and what's so fascinating is that it was published in 1967. "Adam Smith" probably wouldn't be surprised to know his book is still just as relevant fifty years later because in The Money Game, he references a book that was written 86 years prior.
Brown Advisory
SEPTEMBER 3, 2015
Rude Awakening. achen. Thu, 09/03/2015 - 15:10. As recently as 2012 Puerto Rico was able to sell to investors public-sector bonds despite its bleak fiscal outlook and shrinking economy. The commonwealth’s default last month on a portion of $72 billion in troubled debt spotlights not just an ill-advised investment, but a pitfall in the municipal bond market.
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The Irrelevant Investor
SEPTEMBER 22, 2015
I’m beyond excited to share the news that Ben Carlson is joining Ritholtz Wealth Management to lead our Institutional Asset Management. I have followed Ben’s work since he began writing at his blog- and now a book - A Wealth of Common Sense in February, 2013. Ben has rapidly grown into the Jason Zweig of my generation. This means that he has the ability to write about any issue in such a way that can be understood by anyone, regardless of their level of financial knowledge.
The Irrelevant Investor
SEPTEMBER 19, 2015
I'm a big fan of the Alpha Architect team. What really struck me when I first met these guys is how knowledgable, yet humble they are. Like many quants, they understand the limitations of the human brain, which has led them on their search for evidence-based investing. Nobody pumps out more quality data-driven stuff on a daily basis than these guys.
Speaker: Erroll Amacker
As businesses increasingly adopt automation, finance leaders must navigate the delicate balance between technology and human expertise. This webinar explores the critical role of human oversight in accounts payable (AP) automation and how a people-centric approach can drive better financial performance. Join us for an insightful discussion on how integrating human expertise into automated workflows enhances decision-making, reduces fraud risks, strengthens vendor relationships, and accelerates R
The Irrelevant Investor
SEPTEMBER 17, 2015
Last night Ray Dalio of Bridgewater, a hedge fund managing roughly $170 billion, was asked if he was stepping back. He clarified what he meant, stating that he will take a lesser managerial role. However, when it comes to being involved in the markets, here was his response: "I'm an addict, I can't stop. I love the game." Ray Dalio didn't get to where he was by going half speed.
The Irrelevant Investor
SEPTEMBER 16, 2015
The SPIVA U.S. Scorecard results are out and as is usually the case, active managers had a difficult time keeping up with their respective benchmarks. Before we examine some of the results, it's worth mentioning that SPIVA accounts for the entire opportunity set, which eliminates survivorship bias. Being that 23% of domestic equity funds were merged or liquidated over the last five years, this is something worth pointing out.
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The Irrelevant Investor
SEPTEMBER 11, 2015
As the revolution in "smart beta" rolls on, what's important for investors to know is that many of these products are just factor investing in disguise. Run a regression on many of these strategies and what you will find is they are overweight value stocks and small stocks, strategies that have been known and in play for decades. "After eight years of struggling to outperform the S&P 500, Mike Willis has decided to use the benchmark against itself by equal-weighting all 500 stocks in the ind
The Irrelevant Investor
SEPTEMBER 10, 2015
One of the many seductions of dabbling in the stock market is the potential for lottery winners. Look at the returns these stocks have generated since going public: Starbucks: ~18,000% Amazon: ~21,000% Apple: ~28,000% Microsoft: ~72,000% Disney: 128,000% What many investors don't know or don't seem to care about is that for every Apple, there are several thousand companies that have come and gone (to zero).
The Irrelevant Investor
SEPTEMBER 9, 2015
What if stocks experience their third separate bear market in under twenty years? What would that do to the psychology of investors? For the purpose of this exercise, please allow me to reach a little (I'll explain later). If the S&P 500 were to fall 25% from its peak over the next twelve months (~16% lower from today), it would experience its worst return over a sixteen-year period (5%) since 1931-1947.
The Irrelevant Investor
SEPTEMBER 9, 2015
I recently sat down with Aaron Watson to discuss how I wound up where I am today. Aaron had a similar experience to me in the insurance world and reached out to me for some advice. I met with Aaron and happily agreed to do a podcast with him. We spoke about my beginnings and the path I took to working at Ritholtz Wealth Management. Aaron asks a few questions, I go on several tangents, enjoy.
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The Irrelevant Investor
SEPTEMBER 7, 2015
“In my whole life, I have known no wise people (over a broad subject matter area) who didn’t read all the time – none, zero.” Charlie Munger I can think of few people I would rather emulate than Charlie Munger. So in an effort to walk the walk, I’m challenging myself to read things that are outside my comfort zone. I thought The Origin of Species , the seminal work on evolution by Charles Darwin, fit the bill.
Brown Advisory
SEPTEMBER 3, 2015
Dream or Opportunity? achen. Thu, 09/03/2015 - 15:11. China’s plummeting stock prices, slowing economic growth and currency volatility have pushed many investors out of the market. Nevertheless, we believe that a discriminating investment strategy toward China and neighboring emerging markets has the potential to yield meaningful long-term gains, especially from growth in China’s middle class.
Brown Advisory
SEPTEMBER 3, 2015
Before Tying the Knot. achen. Thu, 09/03/2015 - 15:11. Although the divorce rate has fallen for many years, the emotional and financial costs from a split-up are often very high. Protecting inherited assets from a claim by a family member’s ex-spouse can help limit those losses. Such protection can be a cornerstone for sound estate planning. Few terms have the potential to kill the excitement of a wedding engagement as quickly as “prenuptial agreement.”.
The Irrelevant Investor
SEPTEMBER 2, 2015
The S&P 500 just experienced its worst month since September 2011, falling 6.3% in August. With such a steep decline, the investor in a classic sixty/forty portfolio might have expected bonds to provide protection to their portfolio. The negative 0.08% total return for the Barclays Aggregate Bond Index might lead them to think there's something very wrong going on.
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The Irrelevant Investor
SEPTEMBER 2, 2015
I always enjoy taking a few minutes to flip through Poor Charlie's Almanack. I found the following passage particularly interesting and wanted to share it (Emphasis mine). Munger discusses the importance of "The Circle of Competence," which helps explain what has fueled Berkshire's unrivaled performance over the last several decades. The cash register was one of the great contributions to civilization.
The Irrelevant Investor
SEPTEMBER 2, 2015
I want to share a terrific video of Jim Simons speaking to an audience at MIT. Simons is a mathematician, hedge fund manager and now philanthropist so it's no wonder that his firm is called Renaissance Technologies. In this talk, Simons shares stories about riding a scooter from Boston to Bogota, getting fired from the Institute for Defense Analyses, and the success of Renaissance Technologies.
The Irrelevant Investor
SEPTEMBER 1, 2015
The following exchange is what often occurs on Twitter, especially when markets are volatile and account balances are going in the wrong direction. “Why are you yelling at me?” “Because we have different views on how to make money in the market!!” Social media has changed the game for the better. Unfortunately there will always be those who take umbrage with what you say.
Brown Advisory
SEPTEMBER 1, 2015
Shadow Consumption. achen. Tue, 09/01/2015 - 11:30. Economic recoveries usually feature a surge in consumption as employment and wages rebound. Current U.S. consumption data might instead suggest that many consumers are on the sidelines. But rather than clutching their pocketbooks, consumers are reaching for their smartphones and using digital technology to find bargains online and to share goods, potentially influencing the data.
Speaker: Aaron Berson
Managing spend is more than a cost cutting exercise – it's a pathway to smarter decisions that unlock efficiency and drive growth. By understanding and refining the spending process, financial leaders can empower their organizations to achieve more with less. Explore the art of balancing financial control with operational growth. From uncovering hidden inefficiencies to designing workflows that scale your business, we’ll share strategies to align your organization’s spending with its strategic g
Brown Advisory
SEPTEMBER 22, 2015
Compound Interest | Beware the Trap. achen. Tue, 09/22/2015 - 10:21. Late in an economic cycle, investors in corporate bonds tend to snap up securities that offer a comparatively high yield but understate the risks of default. Here are our thoughts on how to avoid such “value traps.”. From telecommunications companies in 2000, to homebuilders in 2007, to coal mining companies in 2014, recent history offers plenty of cautionary tales for high-yield investors.
The Irrelevant Investor
SEPTEMBER 21, 2015
"There can be few fields of human endeavor in which history counts for so little as in the world of finance. Past experience, to the extent that it is part of memory at all, is dismissed as the primitive refuge of those who do not have the insight to appreciate the incredible wonders of the present." - John Kenneth Galbraith Investment products and the way we transact might look radically different today than they did 100 years ago, but investors' emotions have evolved very little over that ti
Brown Advisory
SEPTEMBER 3, 2015
Europe's Slow Climb. achen. Thu, 09/03/2015 - 15:10. Greece’s debt crisis has dominated the headlines in Europe this year but has not halted regional growth or vitality among European companies showing unexpected earnings strength. War and financial turmoil— the bane of Europe’s economic well-being last century—are currently veiling a rebound in regional growth and unanticipated vigor among European companies.
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