2015

On the Dangers of Conflating Experience and Expertise

Ben Carlson at A Wealth of Common Sense published an article about how many investors conflate experience and expertise in markets. This is one of the most misunderstood aspects of the investment business, and costs investors billions each year.

read more

The Narrative is Reality

Back in the days when I still thought markets were driven by fundamentals I used to be a big fan of Don Coxe’s monthly commentaries. Don was at the epicenter of the commodity / BRIC narrative, and his commentaries were dense with historical context, pithy quotes, and compelling analysis.

read more

Pete Carroll Is Not the Fool, I Am

Abundant ink has been spilled on the subject of Pete Carroll’s decision to pass on 2nd down from the 1 yard line in the Super Bowl two Sundays ago. Some have come out and bombastically stated that it was the WORST CALL IN SUPER BOWL HISTORY!! Others have concluded that, in fact, Carroll was entirely justified in the decision he made.

read more

Your Alpha is My Beta

The goal of this missive was to demonstrate that, when it comes to alpha, where you stand depends profoundly on where you sit. Different investors with varying levels of knowledge, experience, access, and operational expertise will interpret different products and strategies as delivering different magnitudes of value added. At each point, an investor may be theoretically ‘better off’ from adding even simple strategies to the mix, perhaps at lower fees, and even after a guiding Advisor extracts a reasonable fee on top. More experienced investors may be able to harness a broader array of risk premia directly, and thus be willing to pay for a smaller set of more exotic risk premia. It turns out that ‘alpha’ is a remarkably personal statistic after all.

read more

SNB, CHF and Our Colleague…

The Swiss Franc (CHF) was the talk of the financial world last week. We feel compelled to write something about it, but our response will be measured because we know someone directly affected by the situation. You see, we have this colleague…

read more

Finding a Competitive Edge, Part 1

In Saturday’s playoff game he rolled out a new strategy designed to confuse the Baltimore Ravens’ defense.  The details get tricky, but basically the NFL rules require that 7 players on offense must line up on the line of scrimmage. 

read more

Dow 20,000: Is 2015 the Year?

It’s that time of year again. Yup, that jolly, happy time of year when the soothsayers of Wall Street start trumpeting their views on what’s going to happen in 2015, and how to position portfolios to profit. 

read more