Posts Categorized: Finance

Seeing the Future from the Past

Imagine an investor equipped with a crystal ball in 1963—we will call her Cassandra. She would have looked forward five decades and seen some bizarre outcomes. She’d have seen that the best performing stocks would be mundane, boring food & beverage companies, cigarette makers, and insurers. The worst performing (and most volatile) would be stocks…

Welcome to The Investor’s Field Guide

The stock market is a jungle. It is an ecosystem that is unpredictable, dangerous, fascinating, rewarding (to some), and full of life. To navigate it successfully, you need a guide. To write this guide, we are going to take a one year journey through the stock market jungle. If you are interesting in beating the…

Lessons for Investors and Entrepreneurs: The Nature of Value

It is always fun to read a book that is useful for investors and entrepreneurs/businesspeople. Nick Gogerty’s The Nature of Value covers a lot of ground—below I quote and highlight some of the most useful lessons and idea from the book. I also met Nick last week, and it helps that he is a very…

How Expensive Are Expensive Tech Stocks?

The answer: not much more expensive than OTHER expensive stocks in the market. Granted, this is all based on publicly traded companies, not privately funded start-ups. If I had a thorough history against which to compare current fintech or other start-up valuations this might look quite different.  But here is the story. This chart shows the…

Art And Fear And Investing

“I must not fear. Fear is the mind-killer. Fear is the little-death that brings total obliteration. I will face my fear. I will permit it to pass over me and through me. And when it has gone past I will turn the inner eye to see its path. Where the fear has gone there will…

Does Value Still Work?

Everyone knows about value investing now, and everyone is tilting towards value, so its going to stop working. Everyone is saying this to me lately–sometimes as a question, sometimes as a statement of fact.  Yogi Berra famously said, “no one goes to that restaurant anymore, its too popular.” Is the same thing happening to value? The…

What Millennials Want (Or, How You Can Win Their Business)

Millennials are still in the very early stages of market participation: those under 35 own just 4% of mutual fund assets, but the 80-90 million millennials will soar in importance to everyone in the wealth/asset management business before too long. Through inheritance alone, millennials stand to receive $30 trillion in the next few decades. Where…

Why The Grandpa Portfolio Will Crush The Millennial Portfolio

Ever heard that joke about how if you are young and you aren’t a democrat, you have no heart, but if you are old and you aren’t a republican, you have no brain? Well, there seems to be something similar happening with the portfolios of young and old investors. Stocks with the youngest median owners are…

The Very Cheapest Stocks (Price/Book) Do Very Badly

Book to price is a bad value factor. It is a decent stock selection factor overall, but relative to the other ways of measuring value (earnings to price, cash flow to price, EBITDA/EV, etc) it is sub par.  I’ve been interested lately in very concentrated value portfolios, and found it interesting that when running very…

More on Profit Margins

Jesse Livermore has a characteristically great and thorough look at U.S. profit margins up on his website, which I highly recommend.  I’ve written about margins a few times in the past and find them fascinating. Jesse’s key point is how important financial and technology stocks are to current U.S. profit margins, so I thought I’d…