Ritholtz Says Stock-Picking is Still Alive if Not Kicking

Active fund management has been losing followers but isn’t going away entirely, writes Barry Ritholtz in a recent Bloomberg article. While stock-picking has seen a host of changes, he offers several insights as to “how we got here” including the following: Beating the market is tougher than most people thought, a notion that Ritholtz says has become “widely accepted among both professional investors and individuals.” We have a much greater understanding of investor psychology, and… Read More

Barry Ritholtz on Bulls and Bears

Understanding how old a bull market is may very likely affect your expectations of future returns as well as your investment allocations and risk appetite, writes Bloomberg columnist Barry Ritholtz. With regard to what many are calling an eight-year-old bull market, Ritholtz argues, “Rather than saying that the bull market is celebrating its eighth birthday, what we really are observing is the eighth anniversary of bear-market lows.” The difference is in the details, says the… Read More

Ritholtz on the Foibles of Forecasting

Barry Ritholtz, columnist and founder of Ritholtz Wealth Management, offers insights on the “problems and investing risks of forecasting” in a recent Bloomberg View. He explains that, because people dislike uncertainty so much, they tend to believe in predictions to create an “illusion of control and stability, where often there is none. Order is created out of chaos; it is a comforting illusion.” For investors, Ritholtz points out that “one of the biggest risks is… Read More

Ritholtz Warns Against Buying Based on Media “Nice Lists”

Be wary of the media-hype around the “best stocks to own in 2017” says columnist Barry Ritholz, CIO of Ritholz Wealth Management, in a recent Washington Post article. The lists, Ritholz argues, “look slick and professional; they seem to be expertly assembled” with both high-profile and more obscure names. He explains, however, that after taking three of the “top ten” lists gathered from a simple Google search and checking on their performance over the past… Read More

Ritholtz on Hindsight Bias

“Everyone knew Trump would win all along,” writes Barry Ritholtz in last week’s BloombergView, arguing that such hindsight bias “haunts investors constantly.” Specifically, he explains, the human brain creates “stories after the fact to conform with what we now know.” Ritholtz uses the examples of; (1) the financial crisis, and how many people claimed (after the fact) to have seen it coming, and (2) the throngs of folks who say they predicted the success of… Read More

Billionaire Advice Might Not Fit the Bill for All

Another round of advice on sticking to an investment plan might sound like our needle is stuck, but this time we’re coming at it from a slightly different angle. Bloomberg View columnist Barry Ritholtz shares perspective on comments made earlier this month by Convergex chief strategist Nick Colas. The gist of Colas’ view was that investors should heed the advice of billionaire investors such as George Soros, Jeff Gundlach and Bill Gross, all of whom… Read More

Remember Ritholtz’s Advice During Next Market Sell-Off

“Something bad happens somewhere, and markets are unhinged. Once the noise subsides and the markets settles down, everyone wonders what the heck just happened,” writes Barry Ritholtz, chief investment officer of Ritholtz Wealth Management and columnist for The Washington Post. He references the Brexit vote and why it, or other macro events, shouldn’t affect your investment plan. Ritholtz points out that “markets have on average swung 2 percent up or down once every 11 days… Read More

What Investors Can Learn From Baseball Great Ted Williams

“Hall of Famer Ted Williams approached batting not as something done on instinct, but rather as a methodical, evidence-based process,” says BloombergView columnist and founder of Ritholtz Wealth Management, Barry Ritholtz. Ritholtz recalled that Warren Buffett had recommended Williams’ book, “The Science of Hitting,” in the context of making better decisions. He writes that “Williams emphasized research, evaluated data and created specific rules for batting,” and that he “thought deeply about probability, made discipline a… Read More

Lessons from Granville’s Error and the Risks of Market Timing

Barry Ritholtz, founder of Ritholtz Wealth Management and columnist for Bloomberg, briefly recounts the story of Joseph Granville to convey the risk of “1) try[ing] to time markets; 2) tak[ing] ourselves too seriously; and 3) refus[ing] to acknowledge our fallibility.” Granville rose to prominence in the 1970s and had a series of prescient calls by 1981, when 16,000 people were paying to subscribe to his advice and the Wall Street Journal described his newsletter as… Read More

A Flat 2015 is Not Predictive of Coming Bear or Bull Market

Barry Ritholtz, Bloomberg columnist and founder of Ritholtz Wealth Management, points out that 2015 has been essentially flat and, looking to history, concludes: “by itself, a flat market does not tell us very much of anything about the following years’ subsequent returns.” He notes that two opposing views are common in predicting markets after flat returns, one bearish (“flattening indicates that markets are setting up for a major correction or worse”) and the other bullish… Read More