Some notable quotes from what we’ve been reading today: “Private citizens [in China] are now allowed to take up to $50,000 per year out of the country. If just one of every 20 Chinese citizens exercised this option, China’s foreign-exchange reserves would be wiped out.” -Kenneth Rogoff, Harvard economics professor in “The Great Escape […]
Julie Won
Surprise! 2016 May Be Different
Economist John Kenneth Galbraith once said there are two kinds of forecasters: those who don’t know and those who don’t know they don’t know. Yet every year, strategists and commentators go through a New Year’s ritual of making bold, often mistaken predictions about the economy, markets, and geopolitics. Given their poor track record, a cynic […]
In Defense of Buying Bargains
Bargains can be a wonderful thing. People love getting a $100 pair of jeans for $50 — or a bottle of wine or anything else likewise discounted. The exception to this has always been stocks. When a coveted $40 stock goes to $20, it suddenly gets shunned, and that’s been especially true lately. Cheap stocks […]
Cognitive Impairment is a Risk for Everyone
Aging is never too fun to think about, but we all eventually see the physical signs: Slower marathon times, changing body shapes, and graying hair are, after all, hard not to notice. What we don’t recognize as well is cognitive decline, and as a result, we don’t do as good a job preparing for it. […]
CHART OF THE DAY: What happened in 2001 to make earnings reports matter more?
This chart comes from Maureen McNichols, Bill Beaver, and Zach Wang of the Stanford Graduate School of Business on how corporate earnings reports have been affecting stock price volatility after their release. The surprise: the effect of corporate earnings releases on stock prices has increased over time – not decreased — and the change has […]
QUOTE OF THE DAY on negative Italian bond yields
Yesterday, the FT reported that Italy sold 2-year bonds at a negative yield — joining Germany, France, and Switzerland as countries where the rate to borrow money is negative. A negative yield means investors are paying the Italian government for the right to lend it money, and remember, Italy has one of the highest debt […]
The State of World Housing Markets
What are housing prices telling us? Assessing prices usually is complex because housing itself is complex: It fulfills an essential human need, yet also serves as an investment vehicle and a store of wealth – for many, the largest component of their wealth. What’s more, interpreting house valuations requires the context provided by credit growth, […]
Welcome to our 20th Annivesary Issue…
On the next page you can see the very first article on Value Investing that we published in September 1995. Next to it is our most recent one, written this month. Perhaps you’ll see what we see: that the principles of Value Investing remain very much the same. The world we are looking at today […]
Finally, a Financial Dictionary That’s Fun To Read
Quick, what is the definition of “stock market?” According to Jason Zweig’s new book, The Devil’s Financial Dictionary, it is: “A chaotic hive of millions of people who overpay for hope and underpay for value.” Jason Zweig is investing and personal finance columnist at The Wall Street Journal. His lexicon, inspired by American satirist […]
Longing for the golden era of the 1990s
Are we having a moment of nostalgia for the 1990s? I think I am after reading two articles on the subject in as many days. Remember the 1990s? The U.S. economy was in an expansion where we seemed to have cracked the code on balancing inflation and unemployment. There was a budget surplus. Europe was […]
These are painful financial markets . . .
A few weeks ago, John Authers of the Financial Times wrote, “Amid one of the quietest sequences for the stock market on record, making money has proved painfully hard, especially for those who practice the art of value investing.” Recent markets have indeed been painful – lacking conviction and meaning, but offering plenty of uncertainty […]
Big Picture Investment Thinking…
These are strange and difficult times for investors. U.S. stocks are up, but only a handful of companies are driving the indices while a lot of issues are hitting new lows. Storminess in China and Greece, and weakness in oil, gold, and commodities are creating anxiety. And while earnings reports haven’t been disastrous, downward guidance […]
