September 2014: Are Hedge Funds the Answer?
“The implication is that people in the mutual fund world, if they were any good, would be running hedge funds. That’s complete nonsense. Just because you’re greedy, it doesn’t make you smart.” John Osterweiss, investment company founder, CEO and former long/short Hedge Fund Manger No matter how much the economy, housing markets, banking industry and other objective measures of broad financial health continue to improve; it’s never hard to find a fresh source of financial angst. The Financial Crisis of 2008-09 turned out to be an ideal breeding ground for...
Read MoreAugust 2014: How Do Market Timers Perform?
You may have heard us profess that we don’t try to time markets because we believe it is extremely rare to find someone who has successfully done it over the long run. Well now there is more proof. Getting out of the market at the top is one thing, getting back in is another. Mark Hulbert has been tracking 160 financial newsletters since 1980 via his Hulbert Financial Digest. Mr. Hulbert recently wrote an article in the Wall Street Journal titled “Still Trying to Time the Stock Market? Read This First”1. In the article he cites the example of Richard Russell, the editor of the long...
Read MoreMarket Summary – Q2 2014
The year hit the half way mark with the major asset classes all showing positive returns. Real Estate funds soared in the second quarter, no doubt benefitting from new Fed Chairwoman Janet Yellen’s position to continue to use the Fed’s clout to keep interest rates low. Bonds also have enjoyed positive returns this year, confounding those who feared inflation and rising rates would erode bond prices. We wonder if the economic recovery no one believed is beginning to edge out the financial recession no one remembers. CNN Money displays a Fear and Greed Index1 in which six metrics are...
Read MoreJune 2014: Are the Markets Rigged?
Some of you may have read Michael Lewis’ newest book Flash Boys – we devoured it shortly after it was published in April. Others may have watched as Lewis was interviewed on 60 Minutes and other media outlets as part of the “book launch” and still others may be waiting for the inevitable movie. Very briefly, the book outlines a scheme to rig the markets by companies most have never heard of using technology and “dark pools” to wring small gains out of many of the stock trades that occur in the US each day. “investors are systematically disadvantaged”1 Likely as a result of the media...
Read MoreMay 2014: Are Wall Street Wolves Still at Large?
Moviegoers were treated to a harsh view of stock trading earlier this year in the blockbuster movie The Wolf of Wall Street. Leonardo DiCaprio played Jordan Belfort, the 1990’s mastermind of an illegal stock manipulation scheme that defrauded investors and ultimately landed him in prison. The depiction, although based on a true story, seems too wild to be true – Friday afternoon parties to celebrate the week’s “take” with hired strippers, enough drugs to stock a pharmacy and unlimited expense accounts. One compelling scene shows Belfort demonstrating for his salesforce the power of his...
Read More