March 2014: Why do we keep repeating ourselves?
Why Do We Keep Repeating Ourselves? Answer: because on average, a gold fish has a longer attention span. The latest scores on American attention spans are in, and they are not encouraging. Since 2000, the average American attention span1 has fallen from 12 seconds to 8. The average score for a gold fish is 9 seconds. Most educators and psychologists agree that the ability to focus attention on a task is crucial for the achievement of one’s goals. It’s no surprise attention spans have been decreasing over the past decade with the increase in external stimulation. And it’s not just the...
Read MoreMarket Summary – Q1 2014
It has been five years since the stock markets of the US and most of the world hit bottom and began an astounding recovery. On the heels (fins?) of our recent message highlighting how short our collective attention spans have become (see: Do We Keep Repeating Ourselves? emailed March 17th), we dusted off our quarterly review from five years ago to see what was capturing our attention. Here’s what we wrote on April 12, 2009: … The first two months of the year were the worst January and February on record for the US Stock market, while March was the best month since 2002. The four weeks...
Read MoreMarket Summary – Q4 2013
The unusually strong performance of US stocks in 2013 was a welcome surprise for investors who are following a simple buy-and-hold strategy and a source of exasperation for many professionals caught flatfooted by the steady rise in share prices. The S&P 500 rose more than 32% in 2013, its best year since 1997. The broader Russell 3000 index (which includes both large and small company stocks) did even better, gaining 33.55% in 2013. This chart also reminds us there was a steady chorus of worrying media headlines throughout the year. We entered the final three months of 2013 with the US...
Read MoreDec 2013: Beating the Market?
The media continually offers up stories of investors who “beat the market” and companies that skyrocket. Sensationalism sells. Recently the New York Times ran a story titled “Beating the Market, as a Reachable Goal”1. It profiled the Olstein All Cap Value Fund and its manager, Robert Olstein, who looks for value stocks that are unappreciated but strong by a measure known as “free cash flow yield”. According to the article since he started in September 1995 Mr. Olstein has beaten not only the market as measured by the S&P 500 but the venerable Warren Buffett via his company Berkshire...
Read MoreMarket Summary – Q3 2013
The Royal Swedish Academy of Sciences announced on October 14, 2013 that Eugene Fama, Professor of Economics at the University of Chicago will share in this year’s Nobel Prize for Economics.* We congratulate Gene Fama on the recognition he has achieved. It was his research and teaching along with co-author and collaborator Professor Kenneth French ( Dartmouth) on efficient markets and Small Cap and Value investing that provided the insight and inspiration to David Booth who went on to found Dimensional Funds Advisors (DFA). Dr. Booth earned his PhD under Professor Fama in the early...
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