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 (...)
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 and “Buy and Hold is Obsolete!”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.
Where are the bond vigilantes?
At the department store when a product is perceived as overpriced or of questionable long-term value, sales typically decline. Shoppers vote with their feet and go to a different aisle or a different store. But that’s not happening in the US Treasury market. Even with record low yields and record high prices, bonds continue to move. Where are the bond…
“Why Don’t I Own (More) Apple?”
Pretty much everybody wants to own Apple (AAPL). And why not? AAPL is up 55 times since its March 2003 low of $7 and has greater cash reserves than the US government. Plenty of investors are lamenting that they didn’t take a bite of Apple years ago. But here’s the good news. If you are an indexer, chances are you…
A profoundly positive story for the American economy
Now there’s a headline you haven’t seen recently. It comes courtesy of Marc Andreessen, co-founder of Netscape and general partner of the venture capital firm, Andreessen-Horowitz. What does Marc see that so many others don’t? Find out in his very interesting article “Why Software is Eating the World.”
Markets change. Goals remain.
At times during the last two weeks, it’s seemed that the investment world has been spinning on its head. It can make you feel like everything has changed. But has it? First of all, did your goals change in the last two weeks? Possibly, but probably not. No matter what happens in the stock market day to day, most investors…
