myth

Investment Myth #1: You Too Can Become Warren Buffett

A free excerpt from my new book…Few myths are more pernicious than the idea that it’s easy to replicate what Warren Buffett does….

fear

Chart of the Day: Inflation Fears are Rising

The Great Graphic was tweeted by SoberLook.com, and comes from Deutsche Bank which used EPFR data. The chart depicts the money flowing in and out of the ETFs and open-ended mutual funds that offer investors protection from inflation.

strategy2

Benjamin Graham: Father of the Efficient Market Hypothesis?

“Warren [Buffett], don’t worry too much about making money. It won’t change the way you live. It’ll change the way your wife lives.” – Benjamin Graham

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About that “Inflation” Defintion

There’s been a lot of commentary in recent weeks about the definition of inflation.  Specifically, Noah Smith and Paul Krugman have been critical of the way Austrian economists use the definition to mean a rise in the monetary base (as opposed to the more common use as a rise in the price level of a certain basket of goods).  I…

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bear

High Valuations – The Other Side of the Coin

I’ve argued in recent days that valuations metrics won’t help you time the market.  To be clear – I am not saying “valuations don’t matter”.  I am simply pointing out that valuations are dynamic and using an aggregate value metric probably tells you a lot less than you think.   That said, I also wanted to provide some perspective from…

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Chart o’ the Day: Global Food Prices are Deflating

Every time I post a comment about inflation there appears an inevitable anecdote about groceries in the comments discussing how expensive they’ve gotten.  While I certainly appreciate these anecdotes and have my own to tell, I don’t put much credence into them because they simply don’t represent facts.  More often than not they represent a very imprecise individual experience that is…

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psychology_think_thinking

The Concept of “Value” is Dynamic

I stirred up a little controversy in a recent post when I asserted that indicators like Tobin’s Q and Shiller’s CAPE might lead investors astray at times.  In fact, I think there’s empirical evidence that this has happened at times during the last 20 years and particularly during the most recent 5 year bull market when valuations have been historically…

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blind

The Dangers of Following the Herd

This was a great piece in BBC last week on the “wisdom of crowds”.  It reminded me of this recent study finding empirical evidence of herding on trading floors. The article cites James Surowiecki’s book The Wisdom of Crowds and the point he makes about how crowds become increasingly fallible when they begin to incorporate the decisions of others into their own conclusions. Of…

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strategy1

Delivering Alpha & Accepting Beta

“You have to bring a total commitment to the business or you don’t belong. Premium fees demand premium performance.” – Leon Cooperman

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Are US Stocks Heading for a Fall?

It’s a truism that what goes up, must come down—but when, and by how much? That matters, especially if you’re talking about the US stock market.

fear

Inflation is the Right Addiction

Paul Krugman writes a scathing op-ed this weekend about Conservatives and their “addiction” to inflation.  It’s true – many Conservatives have been screaming about the coming inflation for years and Paul is 100% right that they’ve been devastatingly wrong.  They thought government spending and programs like Quantitative Easing would spell doom.  They were wrong, but they weren’t nearly as wrong…

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bubble

This Might be a Stock Bubble, but Valuation Metrics Won’t Help you Understand that

There’s a lot of chatter these days about extended “valuations” and the “bubble” in the stock market.  For instance, I was reading this piece on MarketWatch by Brett Arends which states that we’re now in the “third biggest stock bubble in US history”.  Arends goes on to cite Andrew Smithers of Smithers & Co. and his analysis showing that the…

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