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Why Investing Is A Mystery To Many

by: Lawrence Hamtil  on Sunday, May 29, 2016

One of the things about finance that has often baffled me is how it is that so many are very familiar with the basics of investing, but very few seem truly to understand the wider implications of financial decisions.  I think part of this has to do with how people view their own prospects as well as how they view various financial choices.  They may know instinctively that it's better to save more and spend less, but they probably don't grasp the full opportunity cost of their decisions when they misbehave financially.   Read More

What I've Learned From My Late Clients

by: Lawrence Hamtil  on Thursday, May 26, 2016

Monday is Memorial Day, and while it’s a good time to celebrate with friends and family the coming of summer, it is also a good reminder to thank those who have gone before us, particularly those who died in the service of the nation.  Read More

Did The Fed Really Create a Zombie Economy?

by: Lawrence Hamtil  on Thursday, May 19, 2016

Scott Krisiloff of Avondale Asset Management is a very insightful asset manager and financial commentator.  The "Company Notes Digest" that is available on his company's site is extremely informative, and it's also very useful for anyone looking to get a sense for how corporate officers view the real economy.  That being said, something Scott tweeted out the other day caught my attention: Read More

The Perils of Extrapolating From Factor ETFs

by: Lawrence Hamtil  on Tuesday, May 17, 2016

Charlie Bilello of Pension Partners has an interesting piece titled "The Volatility Cycle" in which he lays out the history of the S&P High Beta and S&P Low Vol indices going back to their common inception in November of 1990.  He notes that, because of recent outperformance by low-volatility sectors such as consumer staples and utilities, the Powershares Low Vol ETF (SPLV) has taken in almost $7 billion in assets while its high-beta counterpart, the Powershares High Beta ETF (SPHB), has taken in only about $88 million in new assets (since 2011). Read More

Advisers: What Can Be Taught and What Must Be Learned

by: Lawrence Hamtil  on Monday, May 16, 2016

Early on in my career in the financial services industry, my colleague, Dennis Wallace, often reminded me that there were some things about the industry that I could be taught, but the most important things I would have to learn on my own through painful experience.  Obviously, he knew after some 20 years in the industry that I, like most young financial professionals fresh from university with a newly minted Series 7 license, was under the impression that everything we had learned in business school about models, ratios, and forecasting would readily apply to the daily grind of financial services, and that our client portfolio and cash-flow projections would go as smoothly as the simulations we had run with our Ph.D. mentors. Read More

Will Aging Baby Boomers Doom The Stock Market?

by: Lawrence Hamtil  on Friday, May 13, 2016

Over the last couples years there have been several articles (see here) and posts (see here) by bearish writers suggesting that market valuations must shrink as the Baby Boomer generation begins its forced distributions from retirement accounts.  The theory is that the succeeding generations, being smaller than the Baby Boomers', are not large enough to digest all of the shares the Boomers are selling, thus forcing down the value of shares.   Read More

Foreign Stocks: Looking Beyond Index Valuations

by: Lawrence Hamtil  on Tuesday, May 10, 2016

There is a lot of talk in the financial sphere about how much cheaper foreign shares are than their American equivalents.  On an index-level basis, this is somewhat beyond dispute; by every metric, the MSCI EAFE Index (EAFE = Europe, Australasia, & Far East) is considerably "cheaper" than the S&P 500: Read More

The Somewhat Overlooked Coal Bubble

by: Lawrence Hamtil  on Wednesday, May 04, 2016

Almost everyone is familiar with the tech and telecom bubbles of the late 1990s, but very few outside of the coal and finance industries are familiar with the coal bubble that peaked in early 2008.  Propelled by various factors as the weak dollar and ravenous Chinese consumption, the coal industry averaged ~43% annual returns from January 2000 through June of 2008 (data from Ken French's site).  Stocks such as Cliffs Natural* and Arch Coal delivered insane returns to investors as you can see from this graphic (data from Morningstar): Read More