Insights on markets, emergent trends, history, innovation, risk management, global economics, strategy, policy, and other topics that catch our attention. Inspired by ongoing research, conversations and events. Written and edited by Osbon Capital Management and published every Thursday morning.
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Too much time is spent talking about price. Fundamentals are ultimately what drive equity prices higher over time. To say this another way, a company’s stock price can’t continue to rise unless it continues to be successful. The famous quote by Warren Buffett is, “In the short run, the market is a voting machine, but in the long run (...)
The big picture, literally
When we ask what your portfolio looks like, we mean it literally. We find that a visual representation of a few critical metrics can tell us a lot about your portfolio and how it can be expected to perform. Let’s take a look at a hypothetical portfolio, in pictures. We know that the risk and return of an investment portfolio…
What Windham is doing
Windham Global Solutions, the portfolio and risk management experts, is an essential provider for Osbon Capital. Windham held its second annual investment conference last week in downtown Boston. What happens when you put savvy Windham people in a room for two days with several dozen clients? Lots of interesting discussion and debate about how to translate financial theory into best practices. And…
How Massachusetts Invests
If you had $50 billion to invest, how would you do it? Let’s take a look at the investment strategy of the Massachusetts Pension Reserves Investment Management board (PRIM), which invests that sum for the benefit of state employees, teachers and retirees. PRIM has done well. How have they done it and what can we learn from their approach?
Digging deeper into long-term returns
Last week we discovered that even in rising markets, up days barely outnumber down days (54 percent up, 46 percent down). This time let’s dig a little deeper in the numbers and see what we can learn about the pattern of equity returns and market volatility.
Will the market go up or down tomorrow?
The answer is yes. It will go up or down, and tomorrow night we can tell you which. As of August 17, the Dow had risen 8 of the last 11 days. Both the Dow and S&P 500 were up 6 weeks in a row, and the NASDAQ 5 weeks in a row. What do these trends mean for the…
It’s okay to feel good
Here’s a headline you’re not ever likely to see: “Good news breaks out!” The media always prefers a crisis. Nonetheless, behind the relentless drumbeat of negative news coverage (Europe! Deficits! Slowdown!), there is unmistakably good market news across the board so far in 2012. Let’s look at a few facts.
Too big to succeed
First the “flash crash.” Then the Facebook trading debacle. Now, Knight Capital shoots itself, accidentally and critically. What’s going wrong with the basic market function of an orderly match between buyers and sellers? Let’s look closer look inside the maelstrom that is the cutting edge of modern trading for the answer, and perhaps some hidden good news for long term investors.
Investment jujitsu
Investors can sometimes feel like they are facing market opponents that hold all the advantages, be it fantastically rich hedge funds, privileged insiders, rigged markets, or bewildering news events. How can investors thrive in the face of such overwhelming odds stacked against them? I suggest investment jujitsu – using your opponent’s strength to your benefit. Here’s how to practice it.
Why is it so hard to beat an index?
Both practical experience and academic research show that active managers, on average, fight a losing battle when trying to beat indexes in their respective asset classes. Even managers who beat their benchmark for a year or two are not likely to continue for extended periods. Active managers come to the battle well armed – able to exploit limitless research, fundamental and…
