The Wall Street Journal issue of June 28, 2014 carried an article titled, “Huge Returns at Low Risk?  Not So Fast.”  The premise focused on what is known as “back testing”, whereby an investment analyst runs a series of computer simulations to identify an optimal portfolio of stocks that would have produced the best returns … Continued

There is something about food that creates a love close to everyone’s heart.  It is not just the food alone, but the preparation of the food that makes it so special.  At its most elemental level, the art of cooking is about chemistry.  The chef develops the art form in which ordinary ingredients are combined … Continued

As a follow-up to our blog titled “Market Peaks”, we cannot emphasize enough the implicit assumption that stocks can provide very attractive returns over the long term but to achieve those returns, investors must be committed to owning stocks, and have the stomach to hold on to their positions during periods of market weakness. Through … Continued

The markets, as measured by the popular averages, are currently trading at, or near, record highs.  Now what? Perhaps the markets will continue to gradually move up, not every day, but on most days, leading to new highs. Alternatively, we may see a modest correction, possibly on the order of 10%, followed by a resumption … Continued

Admittedly, the bond market is far less exciting than the stock market.  Yet, we believe it is imperative for investors to understand basic fundamentals of fixed income investing and align their portfolios not only according to the current yield curve but given an expectation of where future rates may be headed. For perspective, the 10-year … Continued

The hardest time to make an investment decision is now.  Currently, the issue confronting prospective investors is the extent of the market recovery since the 2008-09 lows and whether it would be smarter to wait for a correction.  If the market does weaken, the new big question becomes, “how extensive will the correction be and … Continued

A great deal of the debate over the perceived limitations of the world’s natural resources appears to reflect a lack of understanding of the difference between shortage and scarce.  A shortage is generally defined as not enough of something that is needed and scarce is defined as a small amount, not plentiful. Consider, Super Bowl … Continued

On May 15, 2014, the Dow Jones Industrial Average dropped 1.6%.  The decline was attributed to a bearish comment made by a well respected investment professional, David Tepper.  “I’m not saying go short, I’m just saying don’t be too fricking long right now,” he said. Another successful investor, Jeremy Grantham, wrote recently in his investment … Continued

In the investment community, short-term, sharp moves in the major stock averages are often attributed to rapid shifts in investor sentiment between fear and greed.  Fear of losing everything or underperforming versus the desire to always try to make a little more or not be left behind. This is probably as good an explanation as … Continued

There are few comments in the lexicon of investment advice that are more likely to cause investment professionals to roll their eyes and cringe.  However, just because most investment strategies have stood the test of time and the proponents of “this time it’s different” are usually proven to be wrong, does not mean that every move … Continued

We are probably all subject to becoming excessively overheated or dismayed at the antics of our elected officials.  Politics can lead to highly emotional reactions, and that’s probably OK, for the most part. Investing is a very different story.  Successful investing requires an analytical approach and an unemotional assessment of the potential investment’s value proposition. … Continued

Through years of working with individual investors I often heard comments such as “Oh, my broker doesn’t charge a fee for managing my assets.” It sounds like a bargain at first, but if you dig deeper, you will discover that brokers are being compensated through various fees (some obvious, some not) including commissions from trading … Continued