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Hedge Funds Grow, Returns Fall

Date30 May 2016

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Over the past decade, investors have continued to pour new assets into hedge funds. Total hedge fund assets under management are now greater than $2.6 trillion, and the number of hedge funds continues to grow (current estimates put them in excess of 10,000, more than twice the number there were in 1990). Consider also that...

A Simple Strategy Your Broker Hopes You Won’t Learn

Date23 May 2016

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The data is irrefutable. There’s a direct correlation between low fees and higher expected returns. Two recent studies from Morningstar bring this point home in a powerful way. The significance of low fees Read the rest of the article at The Huffington Post.

Choose Experiences Over Stuff, and Maybe Over Security Too

Date23 May 2016

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You’ve heard of the American dream, right? The American dream was this machine we built to get rid of uncertainty and create security. It’s the white picket fence, the job and the minivan. You watch Dan Rather and a sitcom. You go to bed, go to sleep and repeat. It may not be that exciting,...

Fiduciary Duty Defeats ‘Phishing’

Date23 May 2016

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Classical economic theory suggests that free markets, in which individuals each act according to their self-interest, yield the best of all possible worlds. All one has to do is look around at places like Cuba and North Korea to see the benefits this system has provided. But economists George Akerlof and Nobel Prize-winner Robert Shiller...

Equity Offerings & Tail Risk

Date23 May 2016

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It’s logical to believe that corporate managers have a preference for issuing equity at times they perceive their firm’s stock price is overvalued or high relative to some benchmark (such as price-to-earnings ratio or book-to-market ratio). The academic research on the subject supports this hypothesis—seasoned equity offerings (SEOs) do tend to be preceded by unusually...

More On The Bad News Delay

Date23 May 2016

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Earlier this week, we discussed a March 2016 study by Rodney Boehme, Veljko Fotak and Anthony May, “Crash Risk and Seasoned Equity Offerings,” which provided evidence that companies will tend to withhold (and accumulate) bad news for an extended period of time, keeping stock prices temporarily higher (think WorldCom and Enron). Bad news, however, cannot...

Rip-offs on a Massive Scale

Date23 May 2016

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Why settle for ruining the retirement dreams of one individual investor at a time when doing so on a massive scale is far more lucrative? That seems to be the strategy of some retirement plan sponsors, consultants, endowments and their advisors. The dire state of retirement funds An article in Zero Hedge describes this sordid...

The Paradox of Finding Motivation Through Fear

Date23 May 2016

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I was driving with a friend recently and telling him about some projects that really excited me. I mentioned a new book I’m working on, an article I’m writing and this new hobby of adventure motorcycling in the desert. He interrupted me and said, “How do you stay so motivated and so excited about things?”...

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