Category Archives: Strategy

China and Memories of 1987

China’s actions in recent days to shore up its market are reminiscent of actions taken in the US after the 1987 stock market crash. Changes in monetary policy, support for margin calls and stock buybacks were all tried in 1987.  At the same time, some other steps taken in China currently – restricting short selling and halting Read more […]

ETFs and Hedge Funds: At What Price Performance?

With the final numbers for the second quarter of 2015 now available, the research firm ETFGI today brought some long-anticipated news: the size of the exchange traded funds market has finally exceeded that of its older, more well-to-do cousins.  It may have taken a little longer than we expected, but ETFs are now a bigger Read more […]

Inside the S&P 500: Adds, Drops and Tall Tales

Each year about 20 to 25 stocks leave the S&P 500 and are replaced with other stocks that meet the guidelines for index membership.  These changes are usually announced five trading days before the index change. Given the size of the asset pool that tracks the S&P 500 — ETFs, index funds and institutional portfolios Read more […]

Greek Fatigue

Greece’s financial problems have dominated headlines in the past week.  Here, e.g., are some excerpts from The Wall Street Journal: Saturday 20 June.  “U.S. stocks ended  lower Friday… worries over Greece sent investors piling into ultrasafe Treasury bonds….” Tuesday 23 June.  “U.S. stocks advanced Monday…lifted by gains in health-care and financial shares as well as Read more […]

Selection or Allocation?

Mr Burge: Do you know Lord Astor has made a statement to the police saying that these allegations of yours are absolutely untrue? Mandy Rice-Davies: He would, wouldn’t he?  At the trial of Stephen Ward, 29 June 1963, in The Guardian 1 July 1963 Like the unfortunate viscount, there’s a certain predictability to the advocates of active Read more […]

Upbeat Housing Reports

Two recent data points – existing home sales and mortgage debt outstanding – point to continued strength in the housing recovery. May total existing home sales, including single family homes, town houses and condominiums, were 5.35 million, up 5.1% and the highest figure since November 2009. Sales of single family homes were 4.73 million, 5.6% Read more […]

Looking Beyond This Week’s FOMC Meeting

The Federal Reserve’s policy makers, the FOMC, meet today and tomorrow (Wednesday) to review the economy and monetary policy.  The minutes of the April meeting and recent comments by various FOMC members point to no change in interest rate policy at this meeting.   Recent economic news is upbeat and the debates over the weak first Read more […]

Will Greece Default, And Does It Matter?

Once again, Europe’s banking and finance chiefs are hunkered around the negotiating table. The Greek prime minister is optimistic a deal can be reached, the German finance minister dismissive. A debt payment is due; it is two minutes to midnight.  The markets are hanging by a thread on the outcome. Writing the news is getting Read more […]

Hope Over Experience

Second marriages, Dr. Johnson reminds us, sometimes represent the triumph of hope over experience. The same applies to many arguments for active investment management. Last week, e.g., The Wall Street Journal announced, with a note of triumph, that “So far this year, actively managed U.S. stock mutual funds have outperformed funds trying to clone the market’s overall Read more […]

The Essence of VIX: What You Really Need to Know

What is the essence of VIX? This may seem like an abstract, philosophical question, but I can assure you it is not. It is a practical one, and if you can understand what makes VIX unique, you will know why this index matters so much. Informed investors know that VIX: Employs a wide range of options Read more […]