Stock Swings and Earnings

A recent article by Bloomberg columnist Nir Kaissar discusses the market’s increased volatility within the context of earnings. “More than a century of data,” he writes, “show that declines in the equity market most often precede slumps in earnings rather than the other way around.” Kaissar points out that although “companies are awash in profits” and Wall Street analysts lean on strong business fundamentals as comfort in the face of volatility, “fundamentals have little to… Read More

Hedge Fund Stars Losing Shine, But the Industry is Fine

Despite the fact that hedge funds have “fallen on hard times”, writes columnist Nir Kaissar in a recent Bloomberg article, “don’t shed a tear for the industry just yet.” The article reports that, although the industry hasn’t kept pace with the broader market in recent years (citing Alan Fournier’s Pennant Capital Management and David Einhorn’s Greenlight Capital as examples), on the whole it has performed better than some of the “star” managers–the HFRI Fund Weighted… Read More

Warren Buffett is the Best Stock Picker

A recent article by Bloomberg columnist Nir Kaissar highlights the investing gifts of billionaire CEO Warren Buffett—who recently released his annual letter to Berkshire Hathaway shareholders. Kaissar underscores how Buffett has routinely beaten the market by investing in companies that are “highly profitable and selling at a reasonable price.” But Kaissar notes that Buffett has done so by a wide margin, even after factoring in profitability and value premiums. “The per-share market value of Berkshire… Read More

Resist Hysteria During Market Stumbles

Bulls should be “as confident as ever,” writes columnist Nir Kaissar in a recent Bloomberg article. Emphasizing that “panicking is never a good plan when it comes to investing,” Kaissar writes, “but it’s particularly silly now, because nothing truly eventful has happened yet.” The economy continues to grow, he writes, and the market’s full valuations are supported by corporate earnings expectations as well as low interest rates. The recent sell-off, he adds, will “undoubtedly make the… Read More

Bloomberg’s Kaissar Weighs-In on Morningstar Fund Ratings

In a recent article, Bloomberg columnist Nir Kaissar challenges the rationale of a Wall Street Journal article suggesting that Morningstar mutual fund ratings lead investors to “assume erroneously” how those funds will perform in the future. “That analysis is flawed,” Kaissar writes. “Morningstar awards stars for beating peers, not the market. Given that the vast majority of funds lose to the market, highly rated funds may not be delivering any value to investors. Buying the… 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

Picking Stocks is Hard, But Picking Growth Might Be Harder

In a recent article for Bloomberg, columnist Nir Kaissar discusses the ongoing debate regarding the challenge of stock picking. He cites a study conducted by University of Arizona professor Hendrick Bessembinder that found, for the period between 1926 and 2016, “only 4 percent of stocks accounted for all the wealth created,” and “50 of those stocks accounted for 40 percent of that wealth.” That basket of 50, writes Kaissar, resembled a growth stock portfolio (and… Read More

Kaissar: U.S. Investors’ Home Bias Not Justified

“Despite all the attention heaped on U.S. stocks this year,” writes Bloomberg’s Nir Kaissar, “there’s been more to cheer overseas.” Kaissar explains that, even though data shows that overseas stocks are outperforming, U.S. investors suffer from “home bias”—that is, they are more comfortable with companies “in their own backyard than in far-off locales, so that’s where they park their money.” These investors focus on domestic market gauges (such as the Dow and the S&P 500),… Read More

Market Timing, Even by Experts, Pays Off Only Modestly

The advice typically given to investors is to “ignore the level of the stock market and never attempt to time it. Meanwhile, “writes Bloomberg columnist Nir Kaissar, “the industry’s brightest lights are doing just the opposite.” Kaissar cites participants in the recent CNBC Institutional Investor Delivering Alpha Conference who argue that a market correction is in the offing. These include Paul Tudor Jones, Jeffrey Gundlach, and Howard Marks, to name a few. “So, which is… Read More

Yale’s Actively Managed Fund Performance Waning

The majority of the Yale University endowment fund is invested with active managers but, if you compare its returns to low-cost active strategies rather than to passive indices, “Yale’s active managers don’t look so special,” writes Bloomberg’s Nir Kaissar. In its recently released 2016 annual report, the article says the esteemed university’s endowment rebutted “fee bashers” by arguing, “The important metric is net returns, not gross fees.” Kaissar points out, however, that Yale’s attempt to… Read More