Zweig and Grant on the Pressure to Go Passive

On a recent episode of WealthTrack, Consuelo Mack interviewed financial journalists Jason Zweig and James Grant regarding the lagging performance of value stocks and the pressure to move to passive investing. Here are some highlights: According to Zweig, “The real utility of a value investing framework is that it helps modulate your emotions as a value investor.” Grant argues that the current cycle is likely to end badly due to: (1) the corruption of accounting… Read More

Zweig: “Smart” Money is Bailing on U.S. Stocks

Wall Street Journal columnist Jason Zweig writes that while data shows how the S&P 500 has outperformed international stocks for years, the numbers can “play tricks on you. It still makes sense to add international stocks to a U.S. portfolio, probably more so than ever.” Zweig notes that while the numbers show that the U.S. market has dominated over the long run, it’s only because stocks have done so well in the recent past. “Lofted… Read More

Everyone Makes Mistakes, Including Warren Buffett

In last month’s Wall Street Journal, columnist Jason Zweig recently wrote, “If I had to write one sentence that is true always and everywhere, it would be this: Smart investors did stupid things again today.” Zweig outlined a series of investing mistakes, including Warren Buffett’s 1993 purchase of Dexter Shoe Co. using over 25,000 shares of Berkshire Hathaway stock. By 2007, Zweig notes, Buffett said the company was “a worthless business.” But neither Buffett nor… Read More

How Companies Fool Investors with Profits Fad

Companies may be worth less than investors think, writes columnist Jason Zweig in a recent Wall Street Journal article. Zweig explains that investors look to earnings-per-share to assess corporate profits and that, over the past twenty years, companies have devised “newfangled” measures of such as Ebitda—earnings before interest and taxes, depreciation and amortization. He argues that this modified measure of cash flow can be misleading. “This charade,” says Zweig, “is meant to flatter profit by… Read More

Industries Concentrate and Investors Profit

By Justin J. Carbonneau (@jjcarbonneau) —  At Berkshire’s Hathaway’s annual meeting, Warren Buffett announced he had purchased approximately 75 million additional shares of Apple. Apple is already Berkshire’s largest holding, and the purchase will make Buffett an owner of roughly 5% of the company. With a current market cap of $940 billion, this makes Berkshire’s stake in Apple worth close to $45 billion. His massive stake in the company shows he strongly believes in the… Read More

Are Index Funds as Cheap as You Think?

In a recent Wall Street Journal article, columnist Jason Zweig rebuts an argument that index fund expenses are drastically understated. The argument comes from veteran value investor David Winters, portfolio manager of Wintergreen Fund, who in his latest letter to shareholders says that the typical S&P 500 index fund incurred expenses of over 4.3% in 2016.  Winters argues that index fund managers get away with “overpaying their bosses” more easily, as measured by shareholder votes… Read More

Will Tech Stocks Continue Their Rapid Growth?

In a recent Wall Street Journal article, columnist Jason Zweig talks about the growth in tech stocks and the outlook for their continued upward trend. “At their lows this week,” writes Zweig, “the technology shares that have until recently been the stock market’s darlings—Facebook, Amazon.com, Netflix, Google’s parent company Alphabet and other giants—had fallen more than 17% since March 13. Over the same period, U.S. stocks overall fell 8%.” Although Zweig points out that the… Read More

Zweig on Buffett and Bitcoin

Author and columnist Jason Zweig says that successful investors–such as Warren Buffett and Charlie Munger–can set aside emotions, according to a recent CNBC article. At the recent Evidence-Based Investing conference in New York, Zweig mentioned Berkshire Hathaway’s Buffett and Munger as among the top tier, adding that they are “inversely emotional and are able to turn emotions inside out,” and “acutely sensitive to the fear inside other people” which they then take advantage of. With… Read More

Are You Prepared for a Stock Market Crash?

Wall Street Journal columnist Jason Zweig takes us back 30 years to Friday, October 1987 when the stock market fell “a record 108.35 points on unprecedented volume of nearly 339 million shares.” He shares a story from famed investor James O’Shaughnessy who, thinking that the selling was “completely overdone” feared that sticking with a bearish bet (having made a “five-figure” bet through buying stock-index put options) would prove costly when stocks bounced back. So, shortly… Read More

Zweig: Income Investors Shouldn’t Get Desperate

Investors feverishly searching for yield in today’s market—”with stocks at record highs and the income on bonds not far from record lows”–are showing signs of desperation, according to columnist Jason Zweig of The Wall Street Journal. Zweig argues that as long as markets continue to show decent performance at “little apparent risk, the more investors come to believe that high returns must be a kind of entitlement.” He cites results of a recent survey in… Read More