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.

Investing 52

Investing Investments Valuation Taxes 52

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].

Investing 52

Investing Investments 52

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.

Investing 52

Investing Investments Valuation Food 52

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.

Financial Advice 52

Financial Advice Accounting 52

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

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.

Investing 52

Investing Investments Marketing Marketing 52

The Irrelevant Investor

DECEMBER 9, 2015

The other day I looked at a common theme among the decade's biggest winners; they tended to be very expensive relative to their peers based on traditional valuation metrics. Today I want to look at another trait these winners share, volatility and big drawdowns. A few things really stand out in this table. Nine of the ten biggest winners were all cut in half.

Valuation 52

Valuation Marketing Marketing Management 52

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.

Management 52

Management Sales Numbers Marketing 52

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.

Investment Advisor 52

Investment Advisor Clients Investing Investments 52

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

Marketing 52

Marketing Marketing Risk Management Economics 52

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

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.

Estate Planning 52

Estate Planning Asset Allocation Assets Planning 52

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.

Taxes 52

Taxes Clients Estate Planning Portfolio 52

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.

Clients 52

Clients Asset Allocation Economics Estate Planning 52

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.

Accounting 52

Accounting Marketing Marketing Investing 52

Advertisement

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

NOVEMBER 30, 2015

I tend to be on the skeptical side when it comes to investing based on seasonal trends. I'm almost always of the mind that less is more and seasonality encourages more decision making, not less. Making changes to your portfolio based on this type of study would probably not be in your best interest when taking into consideration taxes, transaction costs, and most importantly, the cost of being wrong.

Portfolio Management 52

Portfolio Management Portfolio Investing Investments 52

The Irrelevant Investor

NOVEMBER 24, 2015

John Bogle, Cliff Asness, and Ray Dalio are just a few of the juggernauts that have recently been vocal about expecting lower returns. What is an advisor supposed to do when people like this are all on the same side of a very important issue? Here are a few ideas: Lower your expectations, literally. In the financial plan, you can lower expected returns and or adjust inflation upward.

Financial Planning 52

Financial Planning Planning Portfolio Clients 52

The Irrelevant Investor

NOVEMBER 12, 2015

Cliff Asness is out with a new interesting paper, "Market Timing Is Back In The Hunt For Investors." In it, he discusses the efficacy of using valuations, specifically the CAPE ratio, to help time the market. One thing Asness addresses is the valuation drift upward which U.S. stocks have experienced over the last century. Here's Cliff: "As alluded to earlier when discussing the long-term upward drift in CAPE, another related but distinct headwind for contrarian stock market timing in the second

Valuation 52

Valuation Retirement Planning Accounting Sales 52

Brown Advisory

NOVEMBER 12, 2015

Strategic Advisory Letter | 2015 Year-End Planning Checklist. achen. Thu, 11/12/2015 - 11:10. As 2015 comes to a close, we remind our clients and friends of how important it is take time to review new tax rules, consider tax-saving opportunities and review investment and asset-protection plans before year’s end. As autumn rolls on and the holiday season approaches, it is once again time to consider a thorough review of your overall financial picture and your progress toward your long-term object

Planning 52

Planning Taxes Distribution Medical 52

Advertisement

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.

Banking

The Irrelevant Investor

NOVEMBER 11, 2015

"Magicians are the most honest people in the world. They tell you they're gonna fool you, and then they do it." -James Randi I recently watched "An Honest Liar" on Netflix, which is the story of The Amazing Randi, a magician and escape artist who dedicated his life to unveiling the charlatans. He went on a crusade, targeting the psychics and faith healers and exposed them for the con artists that they were.

Management 52

Management Financial Services Assets Valuation 52

The Irrelevant Investor

NOVEMBER 1, 2015

The largest gains are enjoyed by investors with the longest time horizons. Let's take Amazon, obviously an extreme example. From the time of its IPO through the end of 2014, Amazon gained 12,600%. Even after such a remarkable run, Amazon is up over 100% through the first ten months of this year! However, the reality is having any sort of risk management would make it all but impossible to enjoy these outsized returns as even the best performing stocks have experienced massive drawdowns.

Risk Management 52

Risk Management Numbers Investing Investments 52

The Irrelevant Investor

OCTOBER 27, 2015

The Great Crash 1929 by John Kenneth Galbraith was poetically published in 1954, the first year that stocks would eclipse their 1929 highs. One of the most enjoyable aspects of reading about events that shaped history is getting a better sense of what actually happened. Ninety years later, the stories tend to morph into something a few steps farther than reality.

Accounting 52

Accounting Numbers Marketing Marketing 52

The Irrelevant Investor

OCTOBER 27, 2015

This is the small cap secret no one ever told you; You've probably heard about the small stock premium, the idea that over long periods of time, small stocks outperform large stocks. There are a bunch of different theories as to why this is the case. Some believe the additional returns are compensation for decreased liquidity, additional volatility, or both.

Investing 52

Investing Investments Numbers Portfolio 52

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.

Financial Advice

The Irrelevant Investor

OCTOBER 23, 2015

From 1929 through 1932, the Dow Jones Industrial Average would lose nearly ninety percent of its value. In this four year period, there were several nasty bear market rallies, lifting the hopes of the hopeful, only to be met with tidal waves of selling. Corporations were collapsing and individuals didn't fare much better. Unemployment in the United States was 25% and U.S.

Banking 52

Banking Marketing Marketing 52

The Irrelevant Investor

OCTOBER 18, 2015

Are the owners of great track records incredibly skilled, or incredibly lucky? This is one of the oldest questions in finance. To explore this further, I'm going to borrow from Scott Patterson and Jack Schwager, the authors of two fantastic books, The Quants and Market Wizards. Here is Gene Fama, Nobel Laureate, the father of modern finance and longtime professor at the University of Chicago, talking to a classroom of students (The Quants, pages 77-79).

Math 52

Math Marketing Marketing Management 52

The Irrelevant Investor

OCTOBER 17, 2015

Brattle St Capital is one of my favorite follows on Twitter. He's constantly sharing interesting data, quotes and other valuable investing insights. The fact that he's doing so anonymously, in which he receives no personal recognition, makes it that much more awesome. Yesterday, he offered some lousy investment theses, learned through experience, which I wanted to share.

Investing 52

Investing Investments Advertising 52

The Irrelevant Investor

OCTOBER 16, 2015

Fama and French wrote "The Cross-Section of Expected Stock Returns" in 1992, unveiling their three-factor model. They expanded on CAPM, which boils down stock returns to just one factor, beta. Fama and French took this a step further, finding that the vast majority of a stocks returns can be explained not just by beta, but by size and book-t0-market as well.

Taxes 52

Taxes Assets Marketing Marketing 52

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

The Irrelevant Investor

OCTOBER 15, 2015

At sub two percent on the ten-year treasury, many investors are questioning why bother owning bonds at all. As ninety percent of the returns are derived from the starting interest rate, it's fair to assume that bonds will indeed offer measly returns going forward. While it's not realistic to expect the returns of the last thirty years to continue, I still see great merit to holding bonds in a diversified portfolio.

Portfolio 52

Portfolio Government Sales Assets 52

The Irrelevant Investor

OCTOBER 15, 2015

The last few days and weeks are a great reminder of how difficult it is to successfully trade stocks. There's a reason why there aren't many traders that are household names. Even people in the business would likely find it difficult to rattle off ten legendary traders. One of those legends, Paul Tudor Jones had this to say about trading: "My metric for everything I look at is the 200-day moving average of closing prices.

Marketing 52

Marketing Marketing Investing Investments 52

The Irrelevant Investor

OCTOBER 14, 2015

When the average person tries their hand at stock picking, they'll go on the internet and check the price-to-earnings ratio. Maybe they'll dig a little deeper and look at the some other statistics. They'll check the institutional ownership, look at the competition, look at its historical valuation, growth rates, debt levels, etc. If you've played this game before, you know how this usually turns out.

Valuation 52

Valuation Management 52