Tag Archives: Craig Lazzara
The Importance of Order
We all know that stock market returns vary substantially over time. For example, the S&P 500®’s performance between 1981 and 2020 ranged from -37% (2008) to +38% (1995). The market’s compound annual return for this period was 11.5%. Investors, however, live with actual portfolio values, not abstract rates of return. Obviously, and other things equal,…
- Categories S&P 500 & DJIA
- Other Tags
- Categories
- S&P 500 & DJIA
- Other Tags
Riding the Value Wave
U.S. equity markets seemed to undergo a fundamental change of direction in September of last year. Exhibit 1 illustrates the shift; our growth indices, which had outperformed value handily through the end of August, have lagged ever since. The spreads between growth and value are even greater when we compute them using our Pure Growth…
- Categories Equities, S&P 500 & DJIA
- Other Tags
When Active Management Looks Easier
How can style bias impact the perception of active manager outperformance? S&P DJI’s Craig Lazzara and Anu Ganti discuss how a better understanding of style bias can help market participants interpret active manager performance and our SPIVA results. Learn more: https://www.spglobal.com/spdji/en/research/article/style-bias-and-active-performance/
- Categories Equities
- Other Tags
Equity: Diversity and Inclusion
We can think of an active equity portfolio as a combination of a benchmark (the S&P 500®, for example) and a set of active bets that measure the portfolio’s deviation from the benchmark. The relative size of the active bets is sometimes called “active share,” and is a convenient way to judge a manager’s aggressiveness….
- Categories Equities, S&P 500 & DJIA
- Other Tags
Woodstock for Capitalists
Berkshire Hathaway is scheduled to hold its annual shareholders’ meeting this Saturday, May 1. This is the second consecutive year in which the meeting will be virtual; in 2019, attendance was nearly 40,000, which makes social distancing somewhat difficult. We noted two years ago that Berkshire’s investment performance, though formidable over the long run, had…
- Categories Equities, S&P 500 & DJIA
- Other Tags
SPIVA and Style
Last week S&P Dow Jones Indices released its SPIVA® U.S. Year-End 2020 Scorecard. As has been the case for 17 of the past 20 calendar years, the majority of active large-cap managers underperformed the S&P 500®. Performance was better for mid- and small-cap managers, as Exhibit 1 shows. What caused the advantage for smaller-capitalization strategies?…
- Categories Equities, S&P 500 & DJIA
- Other Tags
Man Bites Dog: The Year for Active Management?
For at least five years, we’ve noticed that, despite historical performance, active managers regularly proclaim that this year will at last be the time when active management shows its value. I suspect that most advocates of indexing derive at least some guilty pleasure from observing this ritual. (I know I do.) So, we want to…
- Categories Equities, S&P 500 & DJIA
- Other Tags
Efficient Markets and Irrational Exuberance
Recent headlines have reflected the extraordinary behavior of GameStop Corp.; the company’s stock rose from $18.84 at year-end 2020 to $325 at the close on Jan. 29, 2021, then declined to $90 in the first two trading days of February. At year-end, GameStop was the 314th largest stock in the S&P SmallCap 600®. By the…
- Categories Equities, S&P 500 & DJIA
- Other Tags
Persistence
Lyndon Baines Johnson became President of the United States at a moment of national trauma, and left office at a time of tremendous political division. Despite a landslide electoral victory in 1964 and notable legislative achievements, his was not a happy presidency. LBJ observed, in fact, that “being President is like being a jackass in…
- Categories S&P 500 & DJIA
- Other Tags
The Distribution of Alpha
Investment management is a zero sum game. The source of outperformance for a market’s outperformers is the underperformance of the same market’s underperformers. Properly measured, the weighted average sum of the winners’ gains is exactly equal (before costs) to the weighted average sum of the losers’ losses. This identity, along with the professionalization of the…
- Categories Equities, S&P 500 & DJIA
- Other Tags
- Categories
- Equities, S&P 500 & DJIA
- Other Tags