Three Myths of Bonds

The two most important reasons to own high quality bonds in a portfolio are to provide diversification and to provide capital preservation.  A catchy opening line, if there ever was one.  Several big finance words (like diversification and preservation), an unexciting topic (bonds), and a subjective statement that may not seem to have actionable implications [...]

Control the Controllables

Paul Azinger is described by many as the best Ryder Cup captain ever.  In 2008, he led what was arguably the least accomplished, least experienced, and least talented team of American golfers in the history of the Ryder Cup event – a 12-person team, missing the injured Tiger Woods and lacking a single player with [...]

A Story of Correlation and The Greatest Team Ever Assembled

A respected portfolio manager presented recently at an investment symposium where she explained an investment strategy that has consistently maintained zero correlation to stocks.  Several times during her presentation, she described why the strategy should be expected to maintain a near-zero correlation to stock markets in the future.  During the break that followed, financial advisors [...]

4 Things You’ll Wish You Did Before the Bull Market Becomes a Bear Market

"We all must suffer one of two things: the pain of discipline or the pain of regret." Entrepreneur Jim Rohn was not specifically describing the practice of investing with this quote but it fits perfectly.  The harsh reality of investing is that there will be good times and there will be bad times.  Getting greedy [...]

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 [...]

Simple and Effective Investing

“It might be the simplest play in all of sports, and the most effective.  Give the ball to Michael Jordan, and everyone else get out of the way.” These two sentences began an Associated Press article on May 28, 1989.  The day prior, the Chicago Bulls had the ball in the closing seconds of a [...]

The Challenge of Individual Stocks

On a recent visit to the Museum of Modern Art (MoMA), I surprisingly stumbled upon an exhibit featuring classic video games such as Tetris, Asteroids, and Pac-Man.  The games were displayed on active video screens with an adjacent explanation of the creativeness or design elegance for why they were each chosen. In their heyday, these [...]

Ancient Greek Heroes, Lotteries, Homer Simpson, and Investment Discipline

The following is an excerpt from the quarterly letter we sent to clients.   We are an overconfident species.  93% of us believe we are above average drivers, 86% of us believe we are better looking than the average person, and 80% of us think we’re smarter than average.  We are convinced that we know more [...]