Thoughts, ideas and insight from the top minds in the investment world
By Jack Forehand, CFA (@practicalquant) — I was talking to someone recently who was exploring potential career options and they asked me a question that got me thinking. They wanted to know why out of all the available career options I decided to work in asset management. I gave the usual answers that many people would give to that type of question. I certainly love what I do, and being able to do something that… Read More
Judging the quality of your decisions can be one of the most challenging aspects of investing. The process can seem simple on the surface because every investing decision you make produces a measurable result in the performance that it generates, but performance is not the obvious yardstick that many investors think it is. The correct decisions in investing sometimes don’t generate the best results. The reason is that investing is not just a game of… Read More
In a recent interview with Yahoo Finance, legendary investor Warren Buffett shared sage advice on investing and life. Here are some highlights: “By far, the best investment you can make is in yourself,” says Buffett, noting the importance of communication skills for young people. “It will increase your value by 50 percent,” he said. “You get exactly one mind and one body in this world, and you can’t start taking care of it when you’re… Read More
In a recent interview with Bloomberg TV, deep value investor Tobias Carlisle explained his macro approach as well as the strategy behind his firm’s ETF. Carlisle, founder and portfolio manager at Acquirers Funds, explained that he seeks “strong businesses that are throwing off cash and buying back stock, very traditional long side for value.” His preferred metric in evaluating companies, he explained, is one that he created himself and calls the “acquirer’s multiple” which is… Read More
Investors can no-longer rely on the “so-called value premium to continue in the future,” according to a recentMarketWatch article by Paul Merriman, author and founder of Merriman Wealth Management. While Merriman believes that value investing is still a good option for investors, he writes, “there’s very little that I can guarantee about future investment returns, and none of it is useful if you’re trying to gain an edge on your fellow investors.” He reiterates that… Read More
A recent article in Visual Capitalist reflects on how the make-up of the world’s largest companies has changed over the past twenty years through a series of charts and explains, “as the broader market narrative changes, so goes the list of the world’s largest companies.” The charts, ordered by market capitalization of the 10 largest public companies in the world in the second quarter of each year (over five-year intervals) offers a “series of snapshots… Read More
A recent article in CFA Institute shares five steps that investors can take to mitigate emotional and cognitive biases and improve their decision-making process: 1. Acknowledge that emotional and cognitive biases exist: “We are more prone to these shortcomings than we like to think,” the article says, adding that raised awareness “helps us question our thought processes.” 2. Adopt meditation and mindfulness: Many top executives “have long practiced and vouched for the positive effects of mindfulness and… Read More
An article in Barron’s discusses how factor investing hasn’t taken on in emerging markets as much as in other asset classes, adding that “investors shouldn’t overlook the opportunities.” The article cites Morningstar data showing that ETFs are more heavily invested in developed countries than in emerging ones, but highlights research conducted last year by the Dutch asset-management firm Robeco showing that a portfolio favoring value and momentum stocks within the MSCI Emerging Markets Index generated… Read More
An article published on the Vanguard website earlier this month highlights takeaways from the 90-year history of the Vanguard Wellington Fund, the nation’s oldest mutual fund. The article, which describes Wellington as “a U.S. balanced fund that’s always held a carefully selected mix of high-quality stocks and bonds,” outlines the following three lessons for investors: · Management is a key component of the Wellington Fund’s average return of 8% since inception, the article explains, adding, “because… Read More
Last month, the world’s fourth richest man continued his effort to give away over 99% of his fortune to charity by donating $3.6 billion in shares of Berkshire Hathaway, according to an article inForbes. Buffett is a cofounder of The Giving Pledge, which “asks billionaires to commit at least 50% of their wealth to philanthropy, and in 2006 promised to donate all of his Berkshire Hathaway stock over time. “Much of Buffett’s largess has been… Read More
An article in Bloomberg reports that activist investor Dan Loeb, who disclosed a $1.5 billion stake in Sony Corp, is encouraging the company to make “dramatic” changes including spinning off its semiconductor business and listing it in Japan. A letter and presentation by Loeb’s firm Third Point also called for Sony—described as the leader in image sensors used in smartphones and digital cameras–to sell its insurance business and stakes in Spotify, arguing that if the… Read More