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 (...)
Giving large
Walk a mile in these shoes Imagine that you run a business where operating revenue is less than half of what you spend. Imagine that the demand for your product is growing as your income is shrinking. Envision that costs are rising, your employee base is overworked and underpaid, and your business model sometimes includes giving away your product or service…
It’s never too late to make smart choices
In recent weeks I’ve described the plan of an impressive 20-year-old investor seeking to amass a comfortable retirement nest egg. Some readers were no doubt mumbling to themselves: great for him, but I don’t have 42 years of investing ahead of me. How about me, right now? Yes, time is a great advantage, but no matter your age, you have…
The road to $5 million
Several weeks ago I described a conversation I had with a college junior who wanted to learn about how to get started in investing for his future. I challenged him to figure out what kind of investment plan he would need to accumulate $5 million for retirement over the next 43 years. Here’s the masterpiece he came up with.
What the Red Sox can teach us about investing
You know the unseemly facts. Our beloved Sox were leading the AL East in late August. When they slipped to second, they had a nine game lead on Tampa Bay for the wildcard playoff slot. Finishing 7-21 over the season’s final month, the wildcard got away too. It still makes you a little sick, doesn’t it? What’s this unhappy tale…
Tortoise 1, Hare 0
When the legendary “bond king” Bill Gross completely abandoned treasury bonds in his Pimco Total Return Fund earlier this year, he was applying decades of bond market experience and knowledge. Unfortunately, he guessed completely wrong on the health of the economy and price of US debt. Which is why his fund is trailing a low-cost, low-profile Vanguard index by an…
The first investment
You know you have done something right as a parent when your child comes to you for advice on how to invest his or her own hard earned money. You smile proudly when asked: What should I buy? or How should I do it? But how should you, the parent, respond? A recent experience with a client and his son…
Do they know something we don’t know?
What can we learn from fund flows – the movement of money in or out of securities? Do the recent outflows (see the Bloomberg article “Fund Outflows Top $75 Billion,”) signal a falling tide for equities, or an opportunity to buy? Or neither? Let’s take a closer look.
Cost is boss when it comes to performance
I often comment on how difficult it is to predict which securities will rise above their peers to deliver higher returns. Frustrating as it may be, there’s just no systematic way to consistently identify winners and losers in advance. However there is one data element, widely ignored by analysts and commentators, that has some predictive value: expense ratio.
Is diversification dead?
Recent violent swings in the equity markets – more down than up – have spawned familiar rallying cries from every corner of the investing world, including “Diversification is Dead!” and “Buy and Hold is Obsolete!” Is it really time to throw out the fundamental tenets of passive investing? John Bogle says No.
