The market experienced a sharp sell-off over the past two months as yields on the 10-year treasury continued to rise towards 5% and the possibility of an expanding geopolitical conflict in the Middle East began to be priced in. Note that when we refer to the market, we are typically referring to the S&P 500...
I am sure you have seen the news regarding the failure of Silicon Valley Bank (SVB). SVB has been the victim of an old-fashioned bank run (driven in part by the impact of rapidly rising interest rates, and in part by a non-sticky deposit base tied to the Silicon Valley boom and bust cycle)....
Stocks fell sharply this past Tuesday with the S&P 500 ending the day down 4.32%. But even with that significant fall, the S&P 500 was still slightly up over the previous week. It is safe to say that markets have been volatile in a whipsaw fashion during 2022. As of writing, the S&P 500 is...
In our previous article, we made the case for why active management still makes sense in a passive-orientated world. After all, if you want better than average returns, then you must be different from the average, which means taking an active approach. But how do you know which active fund to pick? How can you...
What drives stock prices? At times like this, this question is crucial for investors to understand. The answer is that when you really get down to it, stock prices are really determined by only two things: Fundamentals of a business – Earnings per share, cash flow, return on invested capital, etc. Sentiment – How much the...
There are two important considerations for today’s market environment. One (which we wrote about in our last post) is having the economic strength to take advantage of market volatility rather than being beholden to the capital markets. The second consideration has to do with inflation and pricing power. The best hedge against rising inflation isn’t...
Back in August, we wrote about how standard accounting treatment of stock-based compensation can mislead investors about the true economics of a business. As a brief recap– companies often issue stock to employees as part of their compensation. This has become quite popular in tech- land over the past 5 years as two things have...
We believe that a low-cost, passive investing strategy such as an S&P 500 index fund has a place in our industry – after all, for most retail investors who cannot invest the time, nor have the expertise, or the experience, then investing in a highly diversified ‘market’ portfolio is probably the best course of...
The war in Ukraine is creating serious human hardship and suffering not only in the region but around the world. And despite where your politics may land, we can probably all agree that a stock market sell-off is much less of a worry than what many people in Ukraine are currently dealing with. Without diminishing...
We hear many investors and commentators asking; is now a good time to invest? The market is falling, should we sell today and buy back when it’s fallen more? Put simply; no- one can answer those questions- don’t trust anyone who even tries to. There are simply too many external variables to even begin...
