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 Secrets to Better Investing

1) Turn off the financial noise machine. Information overload is the norm in today’s world.  We demand it.  We expect it.  Your mind, my mind, and all of our minds are wired to digest information, emotionally respond to the information, and then to do something as a result.  This is why and how advertising works.  [...]

The Stock Market Sits Down for a Job Review

"Describe your perfect day." Such a simple interview directive rarely fails to provide the most telling of replies.  Responses are almost never scripted in advance and usually provide productive insight into what motivates the interviewee, what passions she has, her creativity, or how she organizes her day.  Responses from previous experience posing this question (even [...]

Turbulence Forecasting for Pilots and Financial Advisors

I'm learning to fly, but I ain't got wings I recently spoke with a pilot about how he obtains and handles the forecasts for in-flight turbulence in advance of a flight.  Before each flight, he gets a fairly precise report of weather along the route and something called a turbulence plot, which is based on [...]

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 [...]

What to Do With Your Emergency Reserve?

The Astute Angle tackles a question that we commonly receive in conversations with clients.  The question comes in many forms but often resembles the following:  I have an emergency reserve (or cash stored up for a future home/car/asset purchase) that I want to keep safe but I also want to make a little return on [...]

Scrabble, Monkeys, and a Better Way of Passive Investing

Oxyphenbutazone is a non-steroidal, anti-inflammatory drug used mostly in eye-drops that was pulled from markets worldwide in the mid-1980’s for its link to bone marrow depression.  More interestingly, but perhaps just as trivial, Oxyphenbutazone represents the highest possible scoring play in Scrabble.  Play it across three triple word score squares and eight already-played, perfectly positioned [...]

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 [...]