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 (...)
Greenspan on Markets
Going to Washington, DC, which is what I did earlier this week for the Bloomberg Washington Summit, is like going to another galaxy. In the DC solar system, politicians, policy makers, influence peddlers, and appointees seem to orbit around each other, each seeking to exert more gravitational pull than the next. You could see, for example, the effect of a planetary…
Invest in your kids
529 plans, also known as “qualified tuition plans” have been available since 2001 and are designed to encourage saving for higher education through tax deferral. In my opinion, they are one of the sweetest deals around. It’s no wonder 529s have grown to total more than $144 billion. Here are some client comments about 529s, and why they use them.
Keep what you make
No one likes to think about how much money goes to the taxman, but there’s no avoiding these thoughts at this time of year. There are many elaborate ways to reduce tax liabilities. Here’s one simple one that has worked like clockwork for 19 years in a row, with essentially no effort required on the part of investors.
Irony alert: Jim Cramer warns investors to ignore noise
A few weeks back the CNBC web site had a clip from Jim Cramer’s frenetic show Mad Money, titled: “Cramer: Filter out the noise!” Donning noise-cancelling headphones for dramatic effect, the animated market commentator counseled investors not to be scared off by certain negative headlines when evaluating stocks to buy. When the noisiest voice in investing advises viewers to ignore…
“Average” is anything but
Dow Jones & Company has contributed greatly to the world of business and investing, most notably through its gold standard news outlet, The Wall Street Journal. But in 1896 when the company named its flagship market index the “Dow Jones Industrial Average,” it created a considerable can of worms that is still open and wriggling today. The problem is a…
In ten-year wager, Buffett index leads hedge fund
At the beginning of 2008 Warren Buffett made a very interesting bet. He wagered $1 million (for charity) that a Vanguard index fund that tracks the S&P 500 would outperform a hedge fund of funds assembled by Protégé Partners LLC over a decade timeframe. With six more years to run on the bet, Buffett’s horse is in the lead. Here’s…
Muppets get no respect
By now, Greg Smith’s resignation letter from Goldman Sachs, delivered via the New York Times op-ed page, ranks high in the pantheon of dramatic stage exits. His message about Goldman culture was straightforward and distressing: “It makes me ill how callously people talk about ripping their clients off.” I spent 20 years in big Wall Street firms. So did I see…
Risk: What’s worth worrying about?
You know the feeling. You hear noisy headlines trumpeting the latest Default, Plunge, Scandal, or Imminent Crisis. Your heart rate quickens. You wonder if you’re in danger. You feel, depending on your personality, paralyzed by doubt, or compelled to do something…anything. That white-knuckle feeling is about investment risk and uncertainty. But what is risk, really? The definition you choose has a big impact…
Don’t confuse investing and gambling
A friendly discussion about whether markets are efficient can easily turn into a heated debate. There are strong feelings on both sides. What it all boils down to is whether an investor or money manager can use available information — including earnings reports, economic indicators, financial ratios, historical price patterns, technology claims, analyst ratings, political news, phases of the moon,…
