I’m taking my own advice to stop reading the news, but unfortunately that means less to blog about. Anyway, last Friday I discussed low volatility “Madoff’ portfolios. One of the most important statistics to keep in mind when constructing a portfolio is the Sharpe Ratio, which measures the risk adjusted return. A low ratio means… Continue reading High Sharpe Portfolios

Cannot tell if this is good news or not, but, in 2013 dollars, the wealth of middle class is below where it was before the recession: The Typical Household, Now Worth a Third Less: The inflation-adjusted net worth for the typical household was $87,992 in 2003. Ten years later, it was only $56,335, or a… Continue reading Most Americans Poorer Than Before Recession

Robert Shiller says we could be in another hosing bubble, but the Bay Area didn’t get the memo. After a huge 2013, prices are off to the races again for 2014: In the most expensive regions of the Bay Area, such as Palo Alto and Atherton, the gains since 2011 have been so pronounced, by… Continue reading Bay Area the Center of the Universe as Home Prices Keep Surging

As a diversion from the usual politics, using a linear combination of ETFs I was able to construct a ‘Madoff-like’ portfolio, without the whole fraud aspect to it. Here’s what it looks like versus the S&P 500: As a rule, I only used liquid, long-only ETFs and no re-balancing. Here’s Madoff’s actual portfolio just before… Continue reading Constructing a ‘Madoff’ Portfolio

Washington Is Giving Up on Everything A can’t-do spirit is settling over Congress and President Obama, writes a leading political handicapper. I, for one, applaud the do-nothing congress for not doing too much. Let Wall St. self-regulate. The private sector, with the help of the fed, has created more wealth in the past five years… Continue reading The Good News: Washington Is Giving Up on Everything

Another great day for stocks as the S&P 500 and Nasdaq make new yearly highs: The biological determinism bull market and economic expansion rages on, with those unfit to participate being swept under the rug. There’s certainly no secular stagnation in tech as Google, Microsoft, Apple, Intuitive Surgical, and Facebook crush earnings yet again. Where’s… Continue reading The Neoconservative Resurgence

The play was a great success, but the audience was a disaster. (Oscar Wilde) As the S&P 500 closes at another record high, the celebration of wealth and intelligence become the new religion of America. Apple and Chipotle report yet another quarter of blowout earnings. Facebook earnings due tomorrow, which will also be blowout. The… Continue reading Some Thoughts About Future Technologies

Cockroaches Bill Ackman and James Cramer are attacking Herbalife again. Hedge fund manager Bill Ackman said on CNBC today that he would give the “most important” presentation of his career on Tuesday when he unveils an investigation into Herbalife’s nutrition clubs. In December 2012, Ackman, who runs Pershing Square Capital, gave a 342-slide presentation publicly… Continue reading Bill Ackman and Herbalife

The left sorrowfully clings to their cheese in the wake of tectonic economic changes. Incapable of adapting, they complain that they cannot keep their old, economically inefficient way of life, that there is too much debt, that stocks are a bubble, interest rates are not high enough, or not enough good paying jobs are being… Continue reading Some Ideas to Reform Education

Theodore Dalrymple of Taki Magazine wrote an interesting article about investing. A passage that stood out: In this life I entrust my savings, such as they are, to advisers, in the hope that they are not of the Bernie Madoff school of finance and investment; but for all I know, or can be bothered to… Continue reading Some Thoughts on Investing, Investor Exceptionalism, Emerging Markets, Bubbles, and Debt