Happy New Year! After reviewing my clients? performance reports, I am almost speechless (which is a rare occurrence)! This past year will surely go down in the record books as one of the best ever, especially for well-diversified investors. But, before we get too excited, let’s see if there is something we can learn from the events of 2003. Take […]
Fund investigations: Should you sell now?
The mutual fund scandals keep coming at shell-shocked investors who wonder whether they should abandon the whole industry and put their money under a mattress. It all depends whether you own shares in funds of companies charged in the scandal. It is important to put the scary headlines in perspective. There are thousands and thousands of mutual funds. Only a […]
Are investors sharper than in 1911?
“One minor conclusion from all this data and experience is that the very small investor is the most inveterate bargain hunter in the world” It is the small investor who always wants 100 percent on his money and who is willing to take the most astounding chances to get it.” Does this magazine quote sound like the typical small investor today” […]
Too much company stock
You would think that after the horror stories about Enron employees who lost their job and their retirement savings more employees would diversify out of their own company’s stock. Not so, according to a recent survey by Hewitt Associates, a benefits consulting firm. It found that at the end of 2002 some 28% of all 401k plan money was invested […]
What do stock traders and lottery ticket buyers have in common?
Why do some investors trade stock frequently in the hope of getting rich, especially when it is easy to see that short-term trading is a losing proposition? The answer may be in comparing the behavior of frequent traders to that of buyers of lottery tickets, suggests Meir Statman, finance professor at Santa Clara University. A few years ago Statman coined […]
Broker is fined for pushing its own funds
Pity the poor Morgan Stanley client—his account contains mediocre mutual funds because his broker got concert tickets and dinner vouchers for selling them. The National Association of Securities Dealers has fined Morgan Stanley $2 million for handing illegal noncash sales incentives to its brokers to push the company’s “house” mutual funds. Big brokerages offer a wide array of mutual funds […]
Predicting Warren Buffett: Lessons on hindsight
Billionaire investor and businessman Warren Buffett has built an enviable investment record through his management of Berkshire Hathaway Inc. From 1965, when he took over the publicly traded company, through late September the stock grew from $18 a share to $75,700, an increase of 4,204%. That is equivalent to an annualized growth rate of almost 25% per year, well in […]
Client Letter – Q3 2003
Once again, we’ve had a great quarter! I have included a Monthly Performance Report from DFA, which shows the quarterly performance for all of the DFA funds. I have placed stars next to the primary DFA funds that I use in my average size portfolios. If you take a moment to review the quarterly performance of these funds, you will […]
An alternative: Small international stocks
Investment allocation theory teaches that a portfolio’s return and risk can be improved by adding more investments with low correlation to other portfolio investments. Investors who have suffered through the risks offered by the U.S. stock market in recent years apparently agree: There has been a large increase in interest in “alternative” investments, such as hedge funds, venture capital and […]
Inconsistent funds: Mutuals change their stripes
Investors who think they know what they are getting when they buy actively managed mutual funds had better look beyond each fund’s name, a new study indicates. Many stock funds use the terms “value” and “growth”in their names, indicating their particular investment leanings. However, over the last five years as the bear market changed the investment landscape, the differences between […]
