February 2019

Bear Bottom

The Classic Bear Bottom

As I toasted a bagel in the kitchen at Fairway this morning, I heard a talking head on TV describe the Christmas Eve market drop as a “classic bear bottom”.  A couple of the show’s co-hosts nodded sagely in agreement, but one pressed him.  You recognized this as the bottom?  Seriously?  And of course he did.  Market breadth, IPOs, and the Federal Reserve all pointed to a “typical” bear bottom. Don’t Believe It The idea that you (or anyone else) can recognize turning points in the market is poison.  The conversation’s casual tone is noxious.  If this guy has figured out how to time the market, why is everyone yawning?  Financial professionals recognize this guy is just bullshitting for the cameras, but civilians might think he’s serious.  They might be tempted to ask their “money guy” why he doesn’t invest based on market breadth, IPOs, and Federal Reserve pauses.  The truth…


An Entire Sleeve of Oreos

As the first waves of taxes get prepared, many are finding that they are not getting as large a refund as they expected.  This is often due to reworked withholding tables as the IRS tried to make it so fewer taxpayers gave Uncle Sam an interest-free loan this year.  This is rational, logical, and surprisingly proactive.  People are losing their minds about it.  There are two main critiques: 1) an assumption that taxes went up 2) this messed up a savings vehicle.  My initial response was that the people complaining about this are unreasonable since most people’s taxes didn’t go up.  Then I remembered something very important. I Cannot Trust Myself I simply cannot trust myself to eat a responsible amount of Oreos in one sitting.  The serving size for Oreos is three cookies.  Three!!!  Double Stuf Oreos have a serving size of two freaking cookies.  This is completely insane. …


No Picture

Tidbits and the Hardest Thing About Investing

2019 has been great for investors as the S&P 500 gained 8.86% so far (through 2/4/2019) in reaction to the release of my investment philosophy.  Ok, maybe there were other factors at play.  If you missed the posts, portfolios should be Risk-Aware, Focused, Elegant, and Realistic.  There were also some investing concepts that just didn’t fit in this framework, but deserve mention.  Each of these could be a post of their own, especially the hardest thing about investing. Time as a Factor Factor investing tries to identify characteristics of stocks that move up to gain an edge over market-cap based indexes.  Factor investing has gained traction over the past few years, beginning with dividend and low volatility funds.  Now most investment firms have agreed on four factors – value, size, dividends, volatility, quality, momentum, revenues, profitability, and liquidity.  Yes, that’s nine factors, but most product sellers use a maximum of…