Month: March 2016

Damned Lies and Statistics

“There are three kinds of lies: lies, damned lies, and statistics.” – Mark Twain in Chapters from My Autobiography (attributed to British Prime Minister Benjamin Disraeli) It was an unusually warm November morning in 2008. Louis Winthorpe IV enters a towering skyscraper on 5th Avenue. As the elevator ascends to the 59th floor, Louis reflects […]

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Chasing Momentum

Momentum is one of the most powerful and persistent market anomalies. The evidence supporting this assertion is overwhelming. The idea that buying past winners and selling past losers (from 1-12 months) can lead to outperformance, though, is still bewildering to many. It’s not intuitive, especially for value investors, to believe that past performance in security […]

“If you’re going to do something in emerging market equities, my recommendation is to short them. They may fall a further 40%.” – Jeff Gundlach, January 25, 2016 Jeff Gundlach hates Emerging Markets. So does almost every other pundit on financial TV. So do the rating agencies. Can you blame them? Over the past five […]

Leverage for the Long Run

Since 1928, the highest source of real returns in any asset class by far has come from the stock market. This is true in spite of the Great Depression of 1929 through 1933 and in spite of the 13 recessions thereafter. Through wars, disasters and political turmoil, stocks have been the best vehicle to not […]

Recession Odds and Soothsayers

“You get recessions, you have stock market declines. If you don’t understand that’s going to happen, then you’re not ready, you won’t do well in the markets.” – Peter Lynch With the financial markets in “turmoil” in early 2016, the most common question asked of economic forecasters: “is the U.S. economy heading into another recession?” […]

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