The Irrelevant Investor

DECEMBER 22, 2015

Last week I asked the question "what if you only invested in stocks when they were cheap?" The chart below got a lot of scrutiny, understandably so. It's hard to believe that stocks did better when they were above their average valuation versus when they were below. I'm happy to chow on some crow here, the chart below is indeed greatly flawed. I think the message I was trying to convey got lost in translation, so I wanted to take the opportunity to address this.

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Brown Advisory

DECEMBER 5, 2015

TEDxWilmington | Sustainable Investing: What you didn't know could make you money. ajackson. Sat, 12/05/2015 - 08:00. This talk was given at a TEDx event using the TED conference format but independently organized by a local community. Learn more at [link].

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The Irrelevant Investor

DECEMBER 18, 2015

Nobody likes to overpay, whether it's for food, clothing, a house, or stocks. The problem is people don't treat stocks the way they do a car, groceries, or jeans. If a cucumber goes from $2 to $10, you wouldn't say "wow, I need to buy some before it goes to $20." You would simply substitute it for another vegetable. However, if a stock rose 400% there are plenty of people who would pile on, anticipating a greater fool will come along after them.

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The Irrelevant Investor

DECEMBER 17, 2015

Wow, this year went really fast. It feels like just yesterday that the Fed finally decided to raise rates. I wanted to share some of my favorite things from 2015. Podcast: I am lucky to be able to help Barry prepare for Master's in Business. Some guests I'm more excited about than others. I would put Ken Feinberg in the "others" category. I was wrong.

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Accounting

The Irrelevant Investor

DECEMBER 16, 2015

"There is nothing new in Wall Street. There can't be because speculation is as old as the hills. Whatever happens in the stock market today has happened before and will happen again" - Jesse Livermore Long before Cliff Asness wrote his dissertation on momentum, Alfred Cowles and Herbert Jones discovered that stocks tended to move in the direction in which they came from.

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The Irrelevant Investor

DECEMBER 15, 2015

As we await for the inevitable(?) first rate hike since 2006, let's take a moment to review what type of year it's been for U.S. Stocks. The S&P 500 has done a whole lot of nothing this year and currently is up just 0.04%. Looking at this minuscule number helps clarify what we already know, that so much of the day-to-day stuff on the screen and on TV is just noise.

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The Irrelevant Investor

DECEMBER 7, 2015

One of the common themes among the very best performing stocks is that they are attached to a high price-to-earnings ratio. It makes sense that the fastest growing companies deserve a higher multiple than the average stock. You'll notice in the table below that nine out of ten of the strongest stocks over the past decade traded at a higher average multiple than the S&P 500.

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The Irrelevant Investor

DECEMBER 2, 2015

It's one thing to call a trade, it's another thing entirely to profit off that call. First, there's the issue of timing. Then you have to be able to execute; when to get in, press your bet, take profits, etc. The excerpt below is from Gregory Zuckerman's The Greatest Trade Ever (emphasis mine). Investment advisor Peter Schiff seemed in an ideal position to benefit from real estate troubles.

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The Irrelevant Investor

DECEMBER 2, 2015

Long before Jim Cramer's record was being dissected, Alfred Cowles was skeptical of the claims made by stock market pundits. Cowles, who later founded the Cowles Foundation for Research and Economics , spent years working on a paper published in 1933, "Can Stock Market Forecasters Forecast? His mission: "It seemed a plausible assumption that if we could demonstrate the existence in individuals or organizations of the ability to foretell the elusive fluctuations, either of particular stocks, or

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Brown Advisory

DECEMBER 2, 2015

Ensuring Legacies Last. achen. Wed, 12/02/2015 - 10:29. Heirs who are unprepared for an inheritance may find that a big windfall can quickly become a mixed blessing. An essential step in estate planning is making sure beneficiaries know all the responsibilities and challenges that accompany the management of increasing wealth. When an aging parent with an air-tight estate plan fails to prepare heirs for an inheritance, an act of kindness runs a high risk of backfire.

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Accounting

Brown Advisory

DECEMBER 2, 2015

Anchoring Expectations. achen. Wed, 12/02/2015 - 12:50. Stock market corrections can prompt investors to impulse selling or other moves that are often harmful to their long-term financial well-being. By walking through four steps with a client, we can refocus his or her mindset on the fundamental issues that help safeguard financial stability and achieve steady outperformance.

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Brown Advisory

DECEMBER 2, 2015

Diamonds In The Rough. achen. Wed, 12/02/2015 - 12:58. Weak commodity prices and flagging emerging market economies have dimmed the outlook for energy and metals companies, and are shaking up the high-yield bond market. Through conservative, bottom-up analysis, we are taking advantage of current market dynamics to buy attractively priced debt in companies with solid revenues and limited vulnerability to an economic downturn.

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The Irrelevant Investor

DECEMBER 1, 2015

There has been a lot of talk lately about the lack of participation; how only a few stocks are actually rewarding shareholders while so many have been burning them. Winners have been few and far between but it's not as if the index is exactly on fire. While it's true that without Amazon and Google the market would be down, even with them, the S&P 500 is only up 1.5% for the year.

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Brown Advisory

DECEMBER 2, 2015

Off the Beaten Trail. achen. Wed, 12/02/2015 - 13:46. Investors should expect the market swings of 2015 to carry over into the new year, driven largely by concerns over weak global growth. We are recommending that clients consider high-yield bonds and other asset classes that can offer the prospect of solid gains that diverge from the path of traditional stocks and bonds.

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