Recessions. Markets. Risk.

Investment offices teem with daily data releases and economic news bites. Afternoon market round-ups attribute the day’s movements to whatever data points best fit the narrative of the day or week. Investors crave the narrative, eagerly awaiting the next market moving release. Lately financial news has inundated us with talk of global slowdowns, trade wars, [...]

Blame Harry

The following post is an edited and abbreviated version of the quarterly investment commentary that we recently sent to RPG clients. A Jewish boy from Chicago is to blame.  Harry Markowitz – a name that anyone who has ever taken a finance course might recognize - grew up in Chicago during the Great Depression.  He [...]

Snowfall in Finland Is Above Average This Winter So Why Do The Knicks Keep Losing

You may have heard the news.  Between October 1st and December 31st, the stock market delivered its worst quarter since 2008 to culminate its worst year since 2008.  It was the stock market's worst December since 1931.  What caused the stock market selloff?   As we say often, there is rarely ever a definitive answer [...]

Underwhelmed, Most of the Time

Investing in the stock market probably does not feel boring in December 2018.  Scary, volatile, unsettling, and capricious are terms that might be used to describe investing over the past few weeks.  But not boring. Yet successful investing is boring.  Beautifully boring.  Famous hedge fund investor George Soros summed it up well: "If investing is [...]

Things That Are Rare

Let's have an honest conversation about things that are rare. 1) A perfect game in baseball In over 210,000 Major League Baseball games spanning 140 years, there have been just 23 perfect games. 2) A full moon solstice  According to the Old Farmer's Almanac, there have been 10 full moon winter solstices and 8 full [...]

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 [...]

Outcomes and Probabilities

German, Brazilian, English, Argentine, and Spanish football fans, take heart.  Football (or in American vernacular - soccer) is quantifiably the least predictable major sport.  In no other sport is luck such a critical determinant of the outcome.  So you have that going for you the next time you sit down with a Frenchman to discuss [...]

Why You Should Not Own Your Best Investment Idea in a Tax-Deferred IRA

The following paraphrases a conversation that I have had many times before with friends and clients.  It is obviously never the same dialogue but the underlying advice is the same - that you should generally not own your favorite investment or can't-miss stock idea in a traditional IRA.   Me: Did you buy this stock because [...]

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 [...]

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 [...]