January 2016

There’s an old Chinese curse: ‘May you live in interesting times.’ Unfortunately, the times are REALLY interesting. So, I thought I’d take the opportunity to bring you up to date on some of the ‘interesting’ things we see, what we’re thinking about…

Like all the children from Lake Wobegon, I am sure all my readers are above-average investors. But I am also sure you have friends who are not, so in this letter we will look at the reasons why they fail at investing, and how they should analyze funds and determine risk.

The WSJ recently had a wonderful letter by Jason Zweig, from which I’d like to quote extensively: When you bought into the gospel of “stocks for the long run,” did you have any idea how long the long run can turn out to be?

The credit markets have frozen; stocks are down and the bear continues to maul us. How are we to react?

Early March, I sent out a letter to all my clients with the byline ‘It is scary’. The basic premise of that admittedly long letter was that we were experiencing what I’d like to call a ‘bubble of pessimism’. I recommend a reread of that letter – the lessons have since been burned into your portfolio.

There was a great article in the New York Times last month: How Men’s Overconfidence Hurts Them as Investors. The data came from Vanguard, the king of index funds, and it offers a valuable message.

There’s an excellent article in the April 9th, 2011 edition of The Economist under the byline ‘The Foolishness of Crowds’. In many instances it’s been shown that the judgment of a group (or crowd) is often superior to that of the most skilled individuals within the group.

Until recently, it was unclear what, if any, parts of the healthcare overhaul would survive the Supreme Court’s ruling. When the court affirmed the law, investors – and tax advisors – found themselves facing a new financial landscape.