That headline was a response I received from a handful of friends regarding my last post on buying puts as tail risk insurance. And I agree. Well, sort of. It’s been long known that there exists a premium for selling insurance…hey, otherwise why would anyone do it? Now what if you could combine the best of [...]
When the tech bubble collapsed back in 2000, the Nasdaq fell from 5,132 to just 1,470 a few months later. Many popular stocks found their market prices gutted. For example, Cisco lost 86% of its market cap, while Amazon fell over 90% from $107 to $7. Losses such as these decimated investor portfolios. In 2008, it happened [...]
South Park is an award-winning, animated TV show on Comedy Central. In one particular episode, we’re introduced to Ms. Claridge, an invalid who communicates only through a series of computerized beeps. One beep means “yes” and two beeps meaning “no.” There’s a scene in which an accident leads to several buildings burning down. Everyone believes the [...]
I get asked all the time by friends and investors variants of the same question: “If you could give someone just one comprehensive book to learn about investing, what would it be”? So we chatted about it on the podcast the other day and I still don’t have a good, single answer. We then put together a [...]
A lot of people look at this bull market, valuations, and think somehow that value has forsaken us. And that the much discussed CAPE ratio doesn’t work. They look at the CAPE ratio, at a current value of about 30 in the US, and think somehow that markets rising along with multiples expanding somehow invalidates [...]
For stocks to meet expectations over next 10 years, valuations must rise to highest they’ve ever been in history. That’s quite a statement. But it’s not my math. The formula comes from the founder of index investing and steward of the largest buy and hold investment company in the world…John Bogle. Some background: Last year [...]
Most investors say they are investing for the long haul. They say they have a 10-50 year time horizon, but act emotionally on a time frame of weeks, quarters, and years. So how do you combat these behavioral temptations of chasing performance? How do you incentivize investors to behave in their own best interest? Our [...]
Most of you reading this are old enough to remember the Beech-Nut fake apple juice scandal in the 1980s. (I’m not, but Jeff wrote the intro and he’s a couple years older than me…) In short, Beech-Nut was marketing “100% apple juice” yet its product didn’t quite make good on this claim. Not only did [...]
A few weeks ago, I was sipping coffee, thumbing through Barron’s as I do every weekend. It’s a way in which I keep a pulse on what’s going on in our space. Though I never consciously pay attention to ads, on that particular morning, one caught my eye – a big full pager from [...]
About nine years ago our good friend Matt Hougan wrote an article called “The World’s Cheapest ETF Portfolio”. He outlined a portfolio with the following allocation: 40% Broad Market U.S. equities 35% Foreign Equities 15% Fixed-Income (broadly diversified) 5% REITs 5% Commodities It weighed in at a super cheap 16 basis points! The following years [...]