Practical analysis for investment professionals

Philosophy


How Many of Our Successes and Failures Should Be Attributed to Luck?

How many stock pickers who outperform this year will beat a dart board next year? The answer depends upon whether luck or skill had more to do with their results.

Take 15: Crush of Debt Threatens First World (Video)

Lacy H. Hunt examines research that demonstrates how current levels of first world debt threaten to cause an economic catastrophe unless action is taken soon.

Book Review: The Clash of the Cultures: Investment vs. Speculation

John Bogle’s story is an oft-told tale, yet even Bogle junkies will learn some fascinating new facts from the latest book by the founder of the Vanguard Group. Every thoughtful investor can benefit from his wisdom, served up with refreshing modesty by a giant in a field notorious for outsized egos.

The Difference Between Trading and Investing (Video)

What it means to be an investor? This video explains the difference between trading and making long-term investment allocations.

Current Thinking on the Financial Crisis and the Way Forward

A great crisis can produce great leaps forward in thought and human achievement. So is there any evidence that the epic financial crisis of 2008 will leave a legacy of fruitful ideas for our financial system?

Cash As Trash, Cash As King, and Cash As a Weapon

Individual investors should not be afraid to hold cash, even when it’s earning little, if it’s available to them when needed most. Investment professionals should get away from misguided notions about how much cash is too much cash in a portfolio.

James Montier Applies His Seven Immutable Laws of Investing to Europe

Noted behavioralist and value investor James Montier addressed the prospect of investing in European stocks through the framework of his Seven Immutable Laws of Investing — a set of common sense, value-based principles that are too often violated by the typical investor.

Rethinking the Risk-Free Rate: Offering Alternatives

In an earlier post, I criticized the concept of the “risk-free rate of return” as both illogical and not reflective of reality — and proposed renaming it the "lowest-available-risk expected rate of return." In this follow-up post, I offer some alternative bedrock rates of return for consideration. My preferred alternative: multifactor productivity growth.

Book Review: Finance and the Good Society

Robert Shiller contends that the recent financial crisis was caused not by greed and dishonesty but by the structural shortcomings of financial institutions. He suggests that the financial industry can serve the common good through financial innovation that creates the kind of inclusive society in which all can benefit.

How To Evaluate Economic Information (Video)

Harm Bandholz, CFA, stopped by our offices to discuss how individual investors should view the release of economic data.



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