Musings

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...
4 February 2013 - 13:11, by , in Musings, No comments
With the concern about inflation, TIPS (Treasury Inflation Protected Securities) seem to get a lot of attention. These are a bond where your return adjusts over time based upon the CPI rate. At the moment they have a negative real return, i.e. if you account for inflation then these bonds have a negative rate of...
30 January 2013 - 21:25, by , in Musings, No comments
There is an email circulating about Australia and guns.  Like many emails, it may err from the truth to make a point. I am not a statistician, criminologist or a gun owner.  I just want the facts about gun ownership in Australia to be portrayed somewhat accurately. I’m not making conclusions or taking a stand...
29 January 2013 - 22:06, by , in Musings, No comments
One of the most common investor concerns I hear is that they don’t want to invest until the economy improves. If the market and the economy moved together they should have a correlation of close to 1, say 0.8. Correlation is measured on a scale of -1 to 1, with -1 being perfectly negatively correlated...
16 January 2013 - 15:34, by , in Musings, No comments
Perhaps the most dangerous words in investing are “It’s Different This Time”.  This is not to be confused with the excellent book by Reinhart and Rogoff. Many wonder, what happened to the recovery that we should be experiencing at the moment. Are we not 4 years into an economic cycle that has had massive amounts...
3 January 2013 - 22:02, by , in Musings, No comments
I have been getting a lot of questions the last few days about changes to the tax code as a result of the recent legislation that was passed.  I have put together a brief email that has some of the salient points and links for further information. I have included some commentary from David Rosenberg,...