Trading, Investing, and Costs

By | 2017-07-17T12:21:28+00:00 March 3rd, 2017|Global Market Update|

How much does excessive trading cost? Source: Sugarbush.com At the Sugarbush ski area in Vermont, there’s a quiet, ungroomed, expert-only part of the mountain known as Castle Rock. 20 years ago, owner Les Otten wanted to “upgrade” the section with a high-speed quad. The locals protested, sporting signs and bumper stickers that read: “More Rock. Less Otten.” These days, I feel that I should be carrying a placard around the market that reads, “More Investing. Less Trading.” Excessive trading increases transaction costs and exposes [...]

Getting Going

By | 2017-07-17T12:21:54+00:00 July 18th, 2016|Global Market Update|

How do you get started investing? Photo: Adam Raoof. Source: Animal Photos Investing can be daunting. Stocks, bonds, real estate, commodities—they all seem to hitting record highs. And there’s all the specialized jargon: cash settlement, maturities, dividends, not to mention taxes. Sometimes it seems like the industry deliberately makes things unclear so you’ll have to go to them for advice. And nothing comes for free, does it? We’ve all read stories of Ponzi schemes and other predatory financial products. It seems safer to leave [...]

The Learning Discipline

By | 2017-07-17T12:22:41+00:00 July 24th, 2015|Global Market Update|

What’s the key to successful investing? Source: Get Refe There isn’t one key. There are lots of them: understanding ourselves, diversification, setting good goals, managing risk—the list goes on and on. And there are many fruitful investment styles: value, growth, momentum, factors, index investing. Successful investors have to pay attention to lots of things all the time. But when you study great investors like Mario Gabelli or Laura Sloate—the blind stock analyst whose blindness forces her to “see” everything differently—one thing stands out: they’re [...]

Fraud, Fraudsters, and False Financials

By | 2017-07-17T12:22:42+00:00 July 20th, 2015|Global Market Update|

Fraud, Fraudsters, and False Financials Can we see financial fraud before it hits us? Photo: Dave Meier. Source: Picography Not always. But published financials can give us some clues as to when managers might be cooking the books. Published financial statements are supposed to reflect reality on the ground. They’re supposed to give an accurate picture about how the business is doing in its day-to-day operations. But we live in a world where investors often fixate on one number—earnings per share (EPS). That number [...]

Trading and Investing (Part 1)

By | 2017-07-17T12:22:59+00:00 April 6th, 2015|Global Market Update|

Can investors learn from traders? Source: GoodFreePhotos The short answer would seem to be no. After all, investing is a long-term discipline. Goals and objectives are measured in years and decades. Trading is short-term, with positions that can last just a few hours, minutes, or even seconds. But both deal with financial instruments and financial risk. Both require you to make decisions with imperfect information. And both play on our emotions—making us euphoric and giddy when we’re up, and frustrated and grumpy when we’re [...]

Mountain Goat Investing

By | 2017-07-17T12:23:02+00:00 March 5th, 2015|Global Market Update|

What’s your investment approach? Photo Credit: Brad Pelz My daughter climbed a mountain in Colorado last month. As she and her friends neared the summit, a mountain goat followed them. It hung around while they had lunch, and presumably had a nice little meal of its own on leftover crumbs and morsels when they left. […]

Saving the Dream

By | 2017-07-17T12:23:08+00:00 December 30th, 2014|Global Market Update|

Why is it so hard to save? Source: US Dept of Interior We often hear that there is a retirement crisis in this country. People don’t save enough today to fund their retirement tomorrow. And with the national savings rate somewhere around 5%, that seems pretty accurate. After all, if you save 5% of your salary for 40 years—and just put it in the bank—by the time you retire you’ll have only two times your salary socked away. If you spend 5% of your [...]

Bonds-a-Go-Go

By | 2017-07-17T12:34:14+00:00 September 29th, 2014|Global Market Update|

Will loyal investors swamp Bill Gross’s new venture? Source: Marketswiki On Friday Bill Gross rocked the investing world by leaving PIMCO, the two-trillion dollar asset management firm he founded, and going to work for a competitor. Gross is one of the best-known investors in the world. With his folksy charm and colorful commentary, Gross made investing in bonds cool, which is pretty tough. Bonds are inherently boring, or should be. If everything goes right, you get your money back; if something exciting happens, you [...]

Economists and Investors

By | 2013-08-12T04:32:20+00:00 August 12th, 2013|Global Market Update|

Why do investors listen to economists? The short answer is, it improves their opinion of meteorologists. The long answer is, the market depends on earnings, earnings depend on revenues, and revenues depend on the economy. So, a strong economy should lead to strong earnings and a strong equity market, and vice-versa. Except when it doesn't. Good economic news can become bad market news when filtered through the Federal Reserve. A stronger economy means higher interest rates which means a higher discount rate applied to [...]

Moving Mountains (Introduction)

By | 2013-05-14T10:35:10+00:00 May 14th, 2013|Global Market Update|

In the spring, skiers from around the world come to Mount Washington for its celebrated backcountry snow. Tuckerman’s Ravine is legendary—its 50-degree pitches and rugged beauty combine to give mountaineers some of the best spring skiing anywhere. And the only cost is the challenge of carrying your own equipment into the bowl and up its pitches. I’ve been going up to Tuck’s for over 15 years, but I’ve only skied there about 2/3rds of the time. The reason is risk. Mount Washington is a [...]