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The Illogic of Index Investing

Thursday, September 10th, 2009, by

Virtually every freshly minted new MBA has been indoctrinated into the cult of the efficient market hypothesis. In it’s simplest manifestation… …the efficient market says that all information–good and bad— about a security is implicit in its pricing, and that there is no sense trying to sort out winners and losers. It helps to understand […]

Three for the Price of One

Thursday, November 20th, 2008, by

It’s refreshing, in a way, that not all the animal spirits have been thrashed out of the financial product manufacturers. No small accomplishment, in this dispirited market, as we continue to circle the drain, having pulled the plug on private ownership of the commanding heights of our economy. ETF’s Really Overreaching I refer to the […]

Explaining the Explainers

Wednesday, November 5th, 2008, by

Rule number one. Never argue with the market. The market is always right. Over time….that is. The hedge fund industry is undergoing record redemptions. Disgruntled investors clogged the exit window at the end of the third quarter, helping to add fuel to the conflagration of equities in October. We can expect similar wreckage at the […]

The Latest Culprit

Tuesday, October 7th, 2008, by

The fundamental maxim in investing is: The market is never wrong. In more pithy terms, you should never fight the tape. So now that we have hammered out the market bailout legislation… Why is the Market Still Tanking? Because there are more sellers than buyers. That’s how markets clear. We will not have full capitulation […]