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Tag Archives: Wall Street Journal

Jan 6, 2015

The Rest of the Story

This morning’s Wall Street Journal offered a partial explanation for the failure of most active managers to outperform their cap-weighted index benchmarks in 2014.  The proffered explanation is that “the rally in U.S. stocks was generally led by giant-company shares, such as Apple Inc., which rose 40%.”  Since most active funds are underweight most mega-cap…

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Dec 9, 2014

Crisis and Opportunity

Last Saturday’s Wall Street Journal carried an excellent list of “16 Rules for Investors to Live By.”  I was particularly impressed by rule #1: “All past market crashes are viewed as opportunities, but all future market crashes are viewed as risks.”  Serendipitously, the 16 rules followed close on the heels of our latest white paper, which deals with…

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Aug 18, 2014

A Renewed Interest in High Yield Bonds

High Yield Bond Market – Outlook has changed to the positive, away from the recent stories of overvaluation and fund withdrawals. The S&P U.S. Issued High Yield Corporate Bond Index returned 1% last week and a 0.43% the week before to recover the loss incurred the last week of July (-1.38%).  Year-to-date the index is…

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Jun 30, 2014

Why are active managers lagging?

In late 2013 and early 2014, we heard considerable chatter about the coming “stock picker’s market.”  2014 would favor stock selection strategies, it was said, because intra-market correlation was falling as macro-economic risks receded.  This morning’s Wall Street Journal reports that the contrary view — that low levels of stock market dispersion would make 2014 an…

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Jun 29, 2014

Creating a Performance Tailwind

Some stock selection schemes seem silly.  This weekend’s Wall Street Journal reports the results of two hypothetical portfolios which are clearly intended to be nonsensical.  One example, the so-called “Graham and Buffett Portfolio” comprises stocks whose ticker symbols consist only of the letters found in the names “Benjamin Graham” and “Warren Buffett.”  Silly it may sound, but…

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May 23, 2014

Worth Every Penny

This morning’s Wall Street Journal reports that “Investors are piling into the shares of small, risky companies at the fastest clip on record, in search of investments that promise a chance of outsize returns….”  We’ve commented on such risk-seeking behavior earlier, because it has an important bearing on the low volatility anomaly. The tendency for low-volatility or…

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Nov 25, 2013

Dividends Matter

This morning’s Wall Street Journal brought word that the Dow Jones Industrial Average, which reached nominal all-times highs earlier this month, was in fact still 1% below “the record that counts,” which record is argued to be the all-time high in inflation-adjusted terms.  The analysis uses the price of the Dow Industrials (e.g., last Friday’s…

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