Public Issues, Private Issues

By | 2017-07-17T16:44:41+00:00 July 13th, 2017|Global Market Update|

What is private equity? Source: Wikipedia Private equity is an equity position in a company that isn’t publicly traded – that hasn’t been listed on a public stock exchange. For ordinary investors, there are two ways to invest in private equity. You can invest in a private equity fund, or you can give money to a friend or family member in exchange for a share of their business venture. Limited partners of Bain Capital’s Asia XI Fund are private equity investors, as are your [...]

Homeward Bound

By | 2017-07-17T12:21:23+00:00 April 6th, 2017|Global Market Update|

Is now a good time to start international investing? Photo: Victor Hancek. Source: Picjumbo Most investors have a home-bias in their portfolio. That is, they own a higher percentage of domestic stocks than a globally diversified portfolio would indicate. This is true for folks who tout indexing as well as for active managers who pick stocks. US-based investors prefer US stocks; UK investors prefer shares listed in London; Japan-based investors prefer Japanese stocks, and so on. There are several reasons behind this. Familiarity bias [...]

Timeless Investing Truths

By | 2017-07-17T12:21:28+00:00 February 17th, 2017|Global Market Update|

Why is investing so rewarding? Photo: Victor Hanacek. Source: Picjumbo Investing is fascinating. It’s not just the financial returns, significant as those may be. But investing is valuable in its own right. The profession is intellectually demanding, the competition is consistently stimulating, and the relationships with clients and colleagues are priceless. Here are some timeless truths about investing that have impressed me over the three decades I’ve been investing and the ten years I’ve been writing about it. First, be humble. You don’t know [...]

Incomes and Outcomes

By | 2017-07-17T12:21:42+00:00 September 23rd, 2016|Global Market Update|

What can investors do about low rates? Source: St. Louis Fed Low interest rate around the world are challenging investors and savers everywhere. And it isn’t just households: state and local pension funds—once fully funded—are now underfunded by almost $2 trillion. With expected returns so low, governments and employees are being called upon to increase their contributions to make up for the shortfall. The resulting strain on public budgets has led to credit-rating cuts in places as diverse as New Jersey, Kentucky, and Chicago. [...]

Consider the Alternatives (Conclusion)

By | 2017-07-17T12:21:44+00:00 September 6th, 2016|Global Market Update|

Consider the Alternatives (Conclusion) So should alternative investments be part of your investment portfolio? Ocean wave. Photo: Jon Sullivan. Source: PD Photo Every investor is different, with different needs, hopes, and limitations. So it would be wrong to make a blanket statement about an entire investment approach. But with that caveat, there are a few enduring principles to consider. First, be aware of what you are paying in fees. Most alternative structures cost a lot—and not just because the managers are greedy. Administration can [...]

On Tips and Tipping (Part 2)

By | 2017-07-17T12:21:53+00:00 July 21st, 2016|Global Market Update|

On Tips and Tipping (Part 2) Everyone wants a tip. What’s the best way to make money? Photo: Nick Stanley. Source: Life of Pix Profitable investing starts with a plan. It starts with investors reviewing their goals, their fears, how much time they have, how much access to their money they need, and other circumstances. No one plans to fail, but many people fail to plan. And if you don’t know where you’re going, any road will do. But once you have a plan, [...]

Humpty-Dumpty Investing

By | 2017-07-17T12:21:54+00:00 July 15th, 2016|Global Market Update|

Investing has gotten really weird. Illustration from “Through the Looking Glass.” Source: Ebbemunk In today’s world the best performing assets are bonds. Bonds that have historically low interest rates continue to defy expectations. Ten years ago, bond guru Bill Gross famously declared that the great, multi-decade bond bull market was over. Since that prediction, long-term US Treasuries have returned 9% per year, while a cap-weighted index of global equities has returned about half that. And so far this year, bonds have zoomed up over [...]

The Triumph of Engineering

By | 2017-07-17T12:21:56+00:00 May 27th, 2016|Global Market Update|

How did Google beat Yahoo? Source: Bloomberg Ten years ago we didn’t know what would happen. Google had just gone public, while Yahoo had been around a while. Both companies had a core search engine, and both were set on expanding their services. Now Google is a $500 billion behemoth, while Yahoo is about to be relegated to the dustbin of history. How did Google win the competition for hearts, minds, and clicks? A lot has to do with the way they engineered their [...]

The Fox and the Hedgehog

By | 2017-07-17T12:22:07+00:00 March 11th, 2016|Global Market Update|

“The fox knows many things, while the hedgehog knows one big thing.” Photo: Jeremy P. Gray The Greek poet Archilocus noticed this almost 3000 years ago. We often see two different types of people. Some people go everywhere, and study everything—pursuing contradictory ideas. They’re eclectic, diffused, and omnivorous. On the other side are souls who pursue a singular, unitary vision, an all-embracing organizing principle that gives the world coherence. We see this all around us. In literature, Dante was a hedgehog: he wanted to [...]

Investing in Quality

By | 2017-07-17T12:22:07+00:00 March 3rd, 2016|Global Market Update|

Investing in Quality What makes the market shine? Photo: Ivan Melanchthon Serrano. Source: Morguefile Over time, companies earn profits. Good companies earn consistent, growing profits in both good times and bad. The profits don’t necessarily grow every year—after all, if you sell oil and the price of oil falls 80%, your margin has to fall. But a managers can still earn a profit, because they haven’t bet the ranch on a the future price of a volatile commodity. Investors pay for the rights to [...]