Category: Musings

16 October 2013 - 12:59, by , in Musings, No comments
There has been a lot spoken about the end of quantitative easing, especially with the government having just performed a stick save so they can deficit spend some more.  The resultant can kicking exercise in Washington is becoming expectant. Why should we care about the end of QE?  Most markets have two variables that cause...
30 September 2013 - 11:54, by , in Musings, No comments
Watched two pieces of great story telling on the weekend – Reservoir Dogs and the finale of Breaking Bad. Common theme “Pink got away” – Mr Pink gets away with the diamonds and Jesse Pinkman is finally free of his angst/torment. It’s a chessy analogy to compare this to the healthcare drama – but what...
27 September 2013 - 14:10, by , in Musings, No comments
Healthcare There seems to be some attention in the media about Healthcare and the partisan solutions attached to various programs… I find it interesting that the conservative republicans are incensed about the introduction of the Affordable Health Care Act (AHCA) – aka Obamacare. The estimated costs to the Government, in other words the deficit that...
23 May 2013 - 12:40, by , in Musings, No comments
Last night saw a – 7.32% move in the Nikkei.  Big day. What does a 7% move in the market mean, for Japan this was a six sigma event, in other words the range of the movement was six times greater than its normal daily movement. Why is this important, because the asset management industry...
8 May 2013 - 9:35, by , in Musings, No comments
We know that emotions, not math are the primary source of investor return when it comes to individual investors.  It’s not the allocation, it’s not a checklist, it’s the narrative or story that people tell themselves. The following picture is a great example of how emotions impact the investment outcome.  It usually gets trotted out...
22 April 2013 - 10:14, by , in Musings, No comments
Why let facts and logic get in the way of an ideological debate…  
27 March 2013 - 16:57, by , in Musings, No comments
When it comes to the performance measurement of the stock market, the S&P 500 is considered to be one of the most widely followed and accepted benchmarks.  The interesting thing about the S&P 500 is that it is a market cap based index, i.e. the bigger the company the more influence it has on the...
8 March 2013 - 19:41, by , in Musings, No comments
One of the core principles of the asset management industry is diversification and asset allocation. You want to own a portfolio of differently correlated investments, i.e. when one zigs the other should zag. A critical component of this is the correlation coefficient between two variables. Correlation is measured between -1 and  +1.  Perfectly negatively correlated...
27 February 2013 - 10:48, by , in Musings, No comments
San Diego Real Estate or The Stock Market? I recently was in a conversation about how great the returns in San Diego Real Estate have been since the “recovery” began and how they made the stock market look terrible. Now this is difficult conversation to have – because it’s like comparing a cantaloupe to a...
13 February 2013 - 23:28, by , in Musings, No comments
We hear a lot about the “aging” of the modern economies – it is true that most of the developed world economies are aging.  Whether it is better nutrition or healthcare, people are now living longer lives. When Social Security first started paying benefits in 1940, there were 159.4 workers per retiree, in 2010 that...