Stories Don’t Necessarily Reflect Reality

In to a recent Bloomberg article, columnist Barry Ritholtz writes,  “Contrary to widespread belief, the news does not drive markets or prices; rather, it is the markets that drive news.” Citing several examples, Ritholtz explains that while “genuine news can drive prices—previously unknown scandals, takeovers, and earnings misses are the stuff that can move stocks and markets.” However, he adds, such events tend to be rare. “Most media coverage,” writes Ritholtz, “reflects the normal human… Read More

Barry Ritholtz on the Bull Market’s Birthday

In a recent Bloomberg column, Barry Ritholtz shares insights on what he characterizes as the distinct differences between bear market recoveries and bull markets, arguing that while March 9, 2009 was a bear market bottom, “we only know that with the benefit of hindsight.” Looking at the “spectacular gains” the market has seen since 2009, Ritholtz argues, “creates a very misleading picture. It ignores the collective psychology of the time—lots of investors back in March… Read More

Ritholtz on Hedge Fund Mediocrity

According to Bloomberg columnist Barry Ritholtz, hedge funds are selling public pension funds “an inflated estimate of expected returns,” adding that “it is a challenge to explain why so much money has found its way to so much mediocre performance.” He cites findings reported by Bloomberg reflecting how “investment managers often share their lofty fees with placement agents who hawk the hedge funds….especially to pension funds. Some states have banned their pension plans from using… Read More

Ritholtz on Market Trends

In a recent interview with NYU professor and research firm L2 founder Scott Galloway, Bloomberg columnist Barry Ritholtz shares insights about investing, current market trends and what may lie ahead. Here are some highlights: Ritholtz points out that 2017 was an unusual year for the market given the extremely low level of volatility. The recent correction he says, is normal. “Risk is a two-sided coin,” he argues. “If you want potential upside, you must be… Read More

Forecasting is a Folly

The tendency at this time of year for those in the financial industry to make predictions about what’s to come is characterized by Bloomberg columnist Barry Ritholtz as a “prelude to looking foolish.” “Over the past years,” writes Ritholtz, “it has been my distinct privilege (and, truth be told, pleasure) to point out how silly this process is,” adding that some of the financial industry’s bigger firms and notable economists are jumping on the bandwagon. Referencing… Read More

Ritholtz on Why We’re Bad at Forecasting

Forecasts are unproductive, writes Barry Ritholtz in a recent Bloomberg article, and we should not make investment decisions based on them. Ritholtz offers a list of reminders for readers of “what we know about forecasts and predictions, and why they are so rarely right.” Here are some highlights: We’re generally bad at it. “Examples are everywhere,” Ritholtz argues, citing how data provides clear evidence to support our failings at economic forecasts, expectations of future technologies,… Read More

Ritholtz on the Question of When to Sell Stocks

The decision of when to sell a stock, according to Bloomberg columnist Barry Ritholtz, is “perhaps the most overlooked and underappreciated problem in finance.” Ritholtz provides a list of questions for an investor to ponder when attempting to make what can be a difficult and complex decision. These include: What is the basis for the selling? In most cases, Ritholtz argues, clients cite news headlines or emotional reasons behind their desire to sell. “Experience teaches… Read More

Ritholtz on Bulls and Bears

To determine whether you harbor a bullish or bearish viewpoint, writes Bloomberg columnist Barry Ritholtz, requires that you consider the causes of the current stock market rally. Ritholtz, a self-proclaimed bull, offers a list of drivers in what he sees as the order of significance. Here are some highlights: Global economic expansion: “Monetary policy,” writes Ritholtz, “is being normalized; growth, employment and wages are mostly solid.” Earnings: Ritholtz points out that earnings are the underlying… Read More

Ritholtz & Kaissar on Passive Versus Active Management

 In a recent online debate concerning active vs. passive investing, Bloomberg columnist Nir Kaissar and Ritholtz Wealth Management’s Barry Ritholtz offered a range of arguments and insights. Here are some highlights: Cost and performance: While Ritholtz believes investors should allocate a “big chunk” of their portfolios to index investing because of lower costs and better performance, Kaissar argues that active (primarily for those focusing on value, quality and momentum) isn’t necessarily more expensive than passive.… Read More

Ritholtz on the Challenges of Active Investing

In a Bloomberg article from earlier this month, columnist Barry Ritholtz outlines some of the benefits and challenges inherent in active investing. He cites the following “desirable goals” and some corresponding impediments to those goals: Alpha: outperformance versus a benchmark. “Of all the reasons to be an active investor,” writes Ritholtz, “alpha may be the most difficult to achieve.” He underscores the significant hurdle that both fund managers and individual investors face when attempting to… Read More