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Dealing With an Investing Blind Spot

Date12 Oct 2015

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Psst. Excuse me. I’ve got a secret. I feel like I should be talking really quietly right now, but first I need to warn you. This secret is going to seem incredibly obvious. You may even wonder why I’m going to tell you about it at all. The secret comes in two parts: 1. We...

Building Optimal Value Portfolios

Date12 Oct 2015

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In 1981, Sanjoy Basu’s paper, “The Relationship Between Earnings’ Yield, Market Value and Return for NYSE Common Stocks,” found that the positive relationship between the earnings yield (E/P) and average return is left unexplained by market beta. Then, in 1985, Barr Rosenberg, Kenneth Reid and Ronald Lanstein uncovered the positive relationship between average stock returns...

Setting Aside Shame and Blame in Financial Decisions

Date12 Oct 2015

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I’m a huge advocate of the “no shame, no blame” rule when it comes to money. But I think there’s some confusion about how the rule works. It’s not that you won’t feel guilt. It’s also not about avoiding responsibility. Instead, it’s about recognizing the zero-sum game of relying on shame and blame to make...

The Secret to Investing in Volatile Times

Date12 Oct 2015

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The financial media loves volatile markets. When the market drops, investors understandably become anxious. They have questions like: What is causing the decline? How low will the market fall? Should I sit on the sidelines until things “settle down”? Are there “defensive stocks” I should buy that will protect me during this period of uncertainty?...

Taxing The Yale Model

Date12 Oct 2015

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The success of the Yale Endowment has been highly publicized, leading many endowments, foundations and more recently, even high net worth individuals, to consider adopting the so-called Yale Model. The Yale Model includes a focus on alternative investments and attempts to capture the liquidity premium available in illiquid investments (such as private equity). In addition...

Taxing The Yale Model

Date12 Oct 2015

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Tax Managed Funds Fail To Impress

Date12 Oct 2015

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There is an overwhelming body of evidence demonstrating that active management is a loser’s game when it comes to both stock and bond investing. The evidence led author Charles Ellis to call active management just that—a loser’s game—because while it’s possible to win, the odds of doing so are so poor that it isn’t prudent...

Avoid Worrying About a Future That May Never Happen

Date05 Oct 2015

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I love spending time in the mountains. So a few weeks ago, I jumped at the opportunity to join a friend, my son and seven of his friends on a trip into the Uinta Mountains. This range sits about an hour east of our home in Park City, Utah. We planned the trip to last...

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