Category: Investing

From Silver Linings to Gray Skies

“I think it was a long step forward in my trading education when I realized at last that when old Mr. Partridge kept on telling the other customers, “Well, you know this is a bull market!” he really meant to tell them that the big money was not in the individual fluctuations but in the main movements – that […]

As Good as It Gets?

If you had to describe the perfect market environment, what would it look like? The following attributes might come to mind: 1) High returns with low volatility and 2) low drawdowns, with 3) global participation, 4) both stocks and bonds rising, 5) the economy expanding, 6) earnings growing, and 7) an easy Central Bank. Sound […]

Statement 1: the average year has between 3 and 4 corrections greater than 5%. Statement 2: every year has between 3 and 4 corrections greater than 5%. Statement 1 is a true statistic regarding the S&P 500 going back to 1928. It can serve as a helpful reminder that there is no reward without risk […]

When High Yield Becomes Low Yield

In December 2008, as the “world was ending,” European junk bonds hit a record high yield of 25.97%. Forecasts of financial Armageddon were widespread, and few could envision a scenario in which subordinated bondholders would receive anything but pain. But the world did not end in December 2008. And over next five years, European junk […]

Welcome to the Casino

Last week we learned how to lose 40% in a day using ETFs. Abridged version: combine leverage with high volatility asset classes… This was of course a tongue-and-cheek exercise. No one buys such things with the goal of losing 40% in a day – they buy with the goal of making that much. And not […]