Today I was reading an interesting article in the WSJ describing the increased risk-taking that many retirees and near-retirees are taking with their investment portfolios.     For instance, “nearly half of Vanguard 401(k) investors actively managing their money and over age 55 held more than 70% of their portfolios in stocks.  In 2011, 38% did so.  At...Read More

For over a decade, bonds offered a terrible value proposition as the Federal Reserve’s zero interest rate policy compressed yields, creating a major mismatch between opportunity and risk.  Investors weren’t being compensated for the substantial interest rate risks that they were incurring.  Remember, just two years ago, there were roughly $18 trillion in bonds that...Read More

This year has been wild in many terrible ways.  One extremely painful phenomenon (for a value investor) has been the massive growth outperformance relative to value.  Coming into the year, we were at the widest relative spread between growth and value since 2000.  After the pandemic tanked stocks more closely related to the economy, the...Read More

2020 has seen a major disconnect between growth and value.  In the first quarter, the Russell 1000 Pure Growth Total Return index returned -13.6%, while the Russell 1000 Pure Value Total Return index returned -35%.  If you think about the companies that are most negatively impacted by the bizarre nature of this crisis where economies...Read More

Benjamin Graham (the founder of value investing) originally came up with the concept of margin of safety.  The idea is to buy a security at a large enough discount to its true worth, that you can greatly reduce your chances of losses, while also maintaining a maximum profit potential.  To determine intrinsic value, one uses...Read More

We had a feeling Monday would be bad and boy, did it deliver with the stock market dropping by nearly 8%, now down 19% in just 13 trading sessions.  The Oil and Gas Exploration and Production ETF was down 37% today alone!  This market selloff is now bigger than what we saw in late 2018,...Read More

Many investors, especially retirees, understandably are focused on generating income from their investments.  Historically, bonds have been one of the best ways to achieve that, with less volatility than equities.  While history can be a fantastic guide to what can potentially happen in the future, looking at recent data on fixed income returns could not...Read More

“Those times when you get up early and you work hard, those times when you stay up late and you work hard, those times when you’re too tired and you don’t feel like working and you do it anyway:  That is actually the dream.  The destination is the journey.” —Kobe Bryant   It is a...Read More

Warren Buffett in July, 1999: “If I had to pick the most probable return over the next 20 year, it would be 6%.” Gallup poll in 1999: “Investors expect stocks to return 13-22% annually.” S&P avg. return from 1999-2019: 6.117%. (Source: Vetle Forsland)   As hard as it is to believe, another decade is coming...Read More

There has been a tremendous amount of news over the last few weeks with the phase 1 trade deal with China, progress on the successor to NAFTA, and the Tories winning in the UK by a wide margin.  We don’t want to overthink individual political or economic data-points, which is a mistake that far too many...Read More