April 19, 2015

Investing Articles

The Credit Suisse Global Investment Return Yearbook 2015 Edition Is Now Free Online

Credit Suisse Global Investment Return Yearbook 2015

Earlier tonight, I published a piece called The Best Stocks To Buy Are Historically Found in a Handful of Industries over at About.com, which at around 3,000+ words, examined the research we discussed recently out of Wharton that looked at the original S&P 500 components in the 50 years following their establishment in 1957 and the end date in 2003.  I have some of the more advanced notes that aren't at all appropriate for beginners, which I plan on publishing on this site as I think some of … [Read more...]

The Mathematics of Diversification and Wealth Building

The Home Depot Stock Certificate Diversification

I've written about the fact that very few American families invest in stock directly.  For every 100 families in the United States, only 15.1 hold shares outright, rather than through a conduit like a mutual fund.  Of that 15.1% sub-group, 29.2% (or 4.41% of all households) are invested in only a single stock, 53.0% (or 8.00% of all households) held stock in only two through nine firms, and 17.8% (or 2.69% of all households) held stock in ten or more companies.  The upsetting part is, of those st … [Read more...]

The S&P 500’s Dirty Little Secret

S&P 500 Methdology

Imagine you live on a little island.  On this island, there is an Italian restaurant that you adore.  Once a week, you go to this place and order chicken cacciatore.  It's made with the best ingredients and the quality is top-notch.  It's so good that, over many years, more and more customers are attracted to the restaurant as high rises are built on the sandy beaches of your formerly quiet home. The increased demand for chicken cacciatore, coupled with the limited local agricultural supply of … [Read more...]

You Can Get Free Pancakes If You Go to IHOP Today!

Free IHOP Pancakes

March 3rd, 2015, is the 10th anniversary of National Pancake Day.  If you head to an IHOP, you can get free pancakes.  They ask, but you are not required, to make a donation to charity in lieu of paying for your meal, with the goal being to raise $3,500,000 this year for Children's Miracle Network Hospitals. You might want to consider bringing your own maple syrup, though.  As you know, one of the few things in life that irritates me to no end is the (what I consider) stupidity of the panc … [Read more...]

The Earliest Known Clip of Warren Buffett Unearthed

Warren Buffett 1962

It is absolutely nuts to me to see this clip of Warren Buffett that was discovered.  In it, he was just shy of 32 years old, roughly the same age I am now.  He was completely unknown outside a tiny circle of people, though rich, wasn't one of the richest men in the country (let alone world!) and this was the year he dissolved his six or so partnerships so he could merge them into a single partnership, setting up office in Kiewit Plaza, where he remains to his day.  Which, I imagine, was a slight … [Read more...]

About That Proposed One-Time $280 Billion Tax on Foreign Corporate Profits …

President Obama Foreign Tax Increase Proposal

President Obama's administration has announced that he wants to impose a one-time tax levy of up to 14% on the $2 trillion in foreign profits American companies have built up and not repatriated in exchange for making repatriation on future foreign profits that were subject to at least a 19% tax rate tax-free, encouraging domestic investment. While the second goal is admirable if one wants to stop American companies from jumping ship to our allies - Canada, the United Kingdom, and Switzerland … [Read more...]

Mail Bag: 30-Year Treasury Bond Prices

Mail Bag Joshua Kennon Pen

It seems about that time, once a year, when we talk about long-term Treasury bond yields. Mr. Kennon, How much money have you made since 2010 shorting the 30 year treasury bond? What is your prediction for 2015? Thank you, Fred R. Fred, Earlier this month, I broke out our five-year performance record.  We ended the period at 23.39% compounded annually, which was a +10.77% annual spread over the aggressive benchmark our custody agent assigns us as a measurement tool, a +7.94% an … [Read more...]

A Basic Overview of What Happened with the Swiss Franc and Nestle’s Share Price

Houang Stephane
M Le Macaron 
Macaroons from Bordeaux (France) from Flickr.   Image made available under Creative Common Attribution 2.0 Generic License

By now, all of you know what happened recently with the Swiss Franc, Euro, and, as an extension, the price change of Nestlé shares in the United States.  It caused a stream of messages to come in through the contact form like I haven't seen in a long time, all with the same theme.  Here are just two, randomly chosen, that sum up the gist of what my inbox looked like on January 15th and 16th. First off, I would like to thank you for your time and for being so willing to share your knowledge of bu … [Read more...]

Thoughts on Stock Market Benchmarks (and an Update to Our 5 Year Investment Returns)

Joshua Kennon Aaron Green 5 Year Investment Results 2014

Over the past 3-4 months, I've had a lot of people write me asking about benchmarks as they pertain to their investment portfolio.  I haven't had time to respond to these messages so I'm going to address the broader topic here and use it as a sort of catch-all to explain how I think about these things and the reason I approach them the way I do. The short version: While benchmarks have their place, I think a lot of investors use them foolishly.  To be specific, I see three major problems with … [Read more...]

The Night Black Wall Street Burned to the Ground

Tulsa Race Riot Official Report 2

When I became obsessed with investing as a child, convinced it offered me the greatest probability of escaping what I saw as an economic dead end due to the community in which I lived, I spent years reading everything I could about any and every event tied to the financial markets and those who shaped them.  Biographies, old newspapers, archived magazines; if it played a role in this country's economic history, I wanted to know about it because these men and women were, in a very real sense, my … [Read more...]