Dividends May Lie…And So Might the Marketing Pitch of Dividend Investing

Few things in our profession are more frustrating than when financial advisors deliver bad financial advice.  It doesn’t have to be that bad financial advice is dishonest or delivered for the wrong reasons (like it is so often, for the benefit of the advice-provider).  It is just that misguided or blatantly wrong financial advice hurts consumers and [...]

Q1 2017 Investment Commentary Part II: Forecasting the Future

Let’s start with a debatable, but widely held fundamental concept of investing: the best predictor of future returns for stocks is the current valuation.  This is generally true of a single stock, a sector, or an entire country’s stock market.  Academics and practitioners debate whether important factors like gross profitability, price momentum, earnings momentum, yield, [...]

Q1 2017 Investment Commentary Part I: The Value of a Crystal Ball

You probably do not know who Jim Simons is.  He likes it that way.  Simons is a quiet figure who is not interested in self-promotion and does not need to be told how great he is.  Despite undoubted countless interview requests over the past 35 years, Simons has largely declined the opportunity to tell his [...]

The Harsh Realities of Individual Bond Investing

Spend any time working in the kitchen of a restaurant and you will think of restaurants very differently going forward.  Following a short experience in a restaurant kitchen during college, I’ve never once sent a meal back for being undercooked, overcooked, or even the entirely wrong order.  Use your imagination and we can just leave [...]

Why The Failure of the Fiduciary Rule Could Still Benefit Consumers and Fiduciary Advisors

Over the past two months, this blog has attacked guaranteed income annuities and the purported advantages of leasing a vehicle, assuredly triggering ill sentiment from annuity salespeople and auto dealerships.  Given the recent string of controversial opinions and analysis, what better time to address the Department of Labor’s “fiduciary rule”?  The fiduciary rule has been a [...]

Stocks at an All-Time High

“Congratulations.  I always thought that record would stand until it was broken.”  -Yogi Berra in a telegram to Johnny Bench after Bench broke Berra's record for most home runs as a catcher.   We recently explained why the Dow Jones Industrial Average is a terrible, no good, very bad index.  In spite of our best [...]

Guaranteed Income and No Risk of Principal – Too Good to be True?

It is difficult to go more than a week without seeing or hearing advertisements for an investment that guarantees zero risk of principal loss, promises an attractive return (5-10% per year), and ensurers lifetime income that never expires.  Admittedly, these promises can sound very attractive on the surface, especially for risk averse investors.  But are they too [...]

Q4 2016 Investment Commentary: Planning vs. Prognosticating

Last Friday here in Atlanta, local businesses closed, restaurants shut their doors by late afternoon, school activities were cancelled, and the Atlanta metro region went under a State of Emergency in anticipation of a debilitating storm.  Meteorologists unanimously predicted 2-5 inches of snowfall later that evening – an obviously dire amount of snowfall by southern [...]

The Dow is a Bad Accident of History

I was a recent college graduate and there I was on the trading desk of a large institutional investment manager, entrusted with a role well beyond the pay grade of a newly minted liberal arts history major.  Like many people in their first job out of college, my primary objective was not to make a [...]

Luck and Skill in Baseball and Investing

The following is our quarterly investment letter that was recently sent to clients. 75 years ago this month, a thrilling World Series concluded what many baseball historians decidedly describe as the best baseball season ever.  That season is notably remembered for two historic accomplishments: Joe DiMaggio’s 56-game hitting streak and Ted Williams finishing the season with [...]