Tag Archive 'Risk'

Green Shoots and Brown Weeds

We conducted our first webcast last week, an update on the housing market, unemployment and the economy. We had a couple of technical issues which were a bit distracting, and we need a new microphone, but all in all a fair overview of the economy which was well received by those who attended. The webcast [...]

Jeremy Grantham: A Must Viewing

As far as I know Jeremy Grantham has never appeared for the general public on TV or video. We get a real treat from Consuelo Mack of Wealthtrack with Jeremy dispensing advice about where the market is now. Like myself he sees the market as reasonably cheap, but not spectacularly so. He gives sound advice [...]

Peter Schiff’s Payback

The insufferable Peter Schiff has a video going around, which frankly, is just brilliant. He may be unpleasant at times, but he nailed this thing, and took mounds of abuse while doing so. More importantly, I KNOW HOW HE FEELS!
The resentment, irritation, condescension and, at times, outright hostility to my Cassandra act makes me wish [...]

So Why Do Hedge Funds Help?

Despite recent struggles, hedge funds have done relatively well. Why? One recent study shows they can (despite academic claims that you can’t) reduce their exposure to market risk, and increase it, in ways that adds to return. Who wudda thunk it?

What a bunch of balderdash

I apologize ahead of time if this post is a bit intemperate.
Buried around a truism, the New York Times has produced a misleading and rather silly piece on the value of “predictions.”

The thrust of the piece is that predicting the markets and the economy, especially in the short term, is fraught with peril. True enough. [...]

Research showing hope for stocks? Very questionable

Mark Hulbert reports on two indicators that historically have pointed towards above average returns for stocks:
The indicator in question focuses on corporate money-raising. Considerable research has shown that when companies turn aggressively to the equity market for their financing needs, through new issues or secondary offerings, it is a sign that the stock market is [...]

Martin Feldstein on the Economy, Credit Markets and Economic Risk

Martin Feldstein, stepping down from heading up the National Bureau of Economic Research since 1977, has piece in the Wall Street Journal that is rather pessimistic about the economic outlook. More tellingly he thinks the recession, if it occurs (and like me, he suspects it has already begun) will be more difficult to stimulate our [...]

Now is when investors can separate

The whole world of economics is enormously more complex than the world of physics. And therefore the teaching of business schools, including Yale’s, is unrealistic. Even though economics is a very old subject, it has not truly come to grips with the main difficulty, which is the inordinate practical importance of a few extreme events.
-Benoit [...]

A timely point to remember

In the insurance business, there is no statute of limitation on stupidity.
-Warren Buffett
If only the monolines (that survive) credit default swap investors, and others could keep this in mind going forward. Risk has to be priced not on the basis of the current environment, but on what that environment might be down the road. In [...]

Valuation: The alleged discounting

The recent downturn from the high in October has led to a great deal of chatter about the markets being cheap. That the recent turmoil has presented us with wonderful buying opportunities based on valuation. Readers here know that I disagree, and vehemently. Which doesn’t mean there isn’t money to be made as speculators. Certainly [...]

Negative basis trades

When assessing risk it always pays to assume that whatever risks you identify there are others associated with them that you haven’t. I pointed out the other day a risk that was associated with my outlook over the last year and a half that I hadn’t seen ahead of time. Here is another.
These trades were [...]

The Yale Portfolio Experience

Finally it is the long-term investor, he who most promotes the public interest, who will in practice come in for most criticism, wherever investment funds are managed by committees or boards or banks. For it is in the essence of his behaviour that he should be eccentric, unconventional and rash in the eyes of average [...]

The Fraud Unseen

So, we now have a new record for trader fraudulently losing billions on bad trades. Nick Leeson will soon join the 1972 Dolphins as great, but behind by the numbers. Just like then I have a niggling thought in the back of my mind, and so does Adam at Adams Options:
So some trader at Societe [...]

The False Promise of Buybacks-Updated

Where Have Buybacks Gone, asks the Wall Street Journal? I cannot tell you how often I heard that buybacks were going to keep earnings strong (Ken Fisher in particular comes to mind.) As the Journal points out, that can dry up if people need the capital, or in a related issue, have loaded themselves up [...]

Today’s Links: BCS Championship Monday Edition

To start off James Hamilton reviews last weeks depressing economic data, and its effect on the stock market. Which leads to the next question.
Trying to get defensive? The Wall Street Journal notices some of the same things we have been talking about that make it difficult, while the New York Times picks up on another [...]