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 06/18   The Stingy News Weekly: June 18, 2017SNW 
 06/18   Institutional investors, just like usFunds 
 06/18   Great returns, gut-wrenching drawdownsMarkets 
 06/18   Whiplash: Value vs. GrowthValue Investing 
 06/18   The Safer Dogs of the TSXStingy Investing 
 06/18   Quant vs traditional investorsMarkets 
 06/18   Still not crazyMarkets 

Most Recent Stingy News

The Stingy News Weekly: June 18, 2017
06/18/17 8:40 PM ESTSNW
This week we have the Safer Dogs of the TSX, perfect foresight, poor timing and more.
More SNW: The Stingy News Weekly: June 11, 2017
The Stingy News Weekly: June 4, 2017

Institutional investors, just like us
06/18/17 8:28 PM ESTFunds
"But what if you picked the top allocation per decade for the next decade, how would that do? ... It would reduce your return by 1.5% per year"
More Funds: Index fund contrarian
O'Shaughnessy and O'Shaughnessy

Great returns, gut-wrenching drawdowns
06/18/17 8:11 PM ESTMarkets
"Our bottom line result is that perfect foresight has great returns, but gut-wrenching drawdowns. In other words, an active manager who was clairvoyant, and knew ahead of time exactly which stocks were going to be long-term winners and long-term losers, would likely get fired many times over if they were managing other people's money."
More Markets: Quant vs traditional investors
Still not crazy

Whiplash: Value vs. Growth
06/18/17 8:08 PM ESTValue Investing
"With mean reversion, investor behavior, and interest rates all lining up on the same side, things are indeed starting to look up for value."
More Value Investing: Graham and Doddsville Spring 2017
Student stock-picking tips

The Safer Dogs of the TSX
06/18/17 8:02 PM ESTStingy Investing
"The Safer Dogs now appear to be relatively cheap - provided they can grow their earnings over time. If a good part of those earnings can be turned into dividends or share buybacks then shareholders will likely be a happy bunch."
More Stingy Investing: A long-term return guess
Branching out in search of value

Quant vs traditional investors
06/18/17 8:00 PM ESTMarkets
"Our conversation centers on the massive shift from what we call discretionary portfolio management - basically stock picking - to a landscape that is increasingly dominated by quantitative investors of various types. We talk about how any investor might hope to earn alpha, and how doing so is harder and harder." [audio]
More Markets: Still not crazy
Hannibal spirits

Still not crazy
06/18/17 7:58 PM ESTMarkets
"Putting all of this together, it means that some of the FAANGs will be back in these stories (for positive or negative impact) soon enough over some ex post time period (3 months, 5 months, 1 year, we'll figure it out after it happens!). And it will likely be just as normal then as it is now and as it was after 2015 when Cliff first noted this."
More Markets: Hannibal spirits
Dave Chilton interview

The Stingy News Weekly: June 11, 2017
06/11/17 7:24 PM ESTSNW
This week we have the dangerous retirement of morally bankrupt mattresses and more.
More SNW: The Stingy News Weekly: June 4, 2017
The Stingy News Weekly: May 28, 2017

Morally bankrupt
06/11/17 7:01 PM ESTManagement
"Most Americans have assumed their bank accounts are sacrosanct. But with the major scandal unfolding at Wells Fargo, angry former employees illuminate the alarming pressure that allegedly led local bankers to defraud perhaps more than a million customers."
More Management: Cheap Chick-fil-A franchise
The uselessness of job interviews

Testing mattresses with Buffett
06/11/17 5:18 PM ESTBuffett
"This year, Warren took me on a tour of Nebraska Furniture Mart, a super-successful megastore owned by Berkshire. We tried out some lounge chairs, played with remote-controlled mattresses, and somehow managed to get lost. Take a look..." [video]
More Buffett: The bet with Buffett
Berkshire Hathaway AGM

The hardest problem in finance
06/11/17 2:45 PM ESTRetirement
"Challenging as those may appear, none compare to what Nobel laureate William Sharpe, 82, calls 'decumulation,' or the use of savings in retirement. It is, he says, 'the nastiest, hardest problem in finance.'"
More Retirement: Safe vs. optimal
Retirement without trepidation

Safe vs. optimal
06/11/17 2:38 PM ESTRetirement
"In one case in the article we identify a 7 percent withdrawal rate as 'optimal.' That is not a 'safe' withdrawal rate. With the market assumptions in the article, the 7 percent withdrawal rate has a 57 percent chance of failure over a thirty-year retirement. Though it is not safe, it does maximize the overall expected lifetime satisfaction for a fairly flexible retired couple who has a secured income base of $20,000 from Social Security."
More Retirement: Retirement without trepidation
Hope triumphing over experience

Hannibal spirits
06/11/17 2:37 PM ESTMarkets
"The Buffett Ratio is back near its record high of 1.81 during Q1-2000. It is simply the US equity market capitalization excluding foreign issues divided by nominal GDP. It rose to 1.69 during Q4-2016. It is highly correlated with the ratio of the S&P 500 market cap to the aggregate revenues of the composite. This alternative Buffett Ratio rose to 2.00 during Q1 of this year, matching the record high during Q4-1999. It is also highly correlated with the ratios of the S&P 500 to both forward revenues per share and forward earnings per share. All these valuation measures are flashing red."
More Markets: Dave Chilton interview
Revenue per employee

Testing DALBAR's claims
06/11/17 2:10 PM ESTBehaviour
"DALBAR suggests that equity mutual fund investors have underperformed the S&P 500 by over 600 basis points annually. In contrast, Russ Kinnel, my colleague at Morningstar Research Services, has noted a more muted impact in his annual Mind the Gap report, typically in the neighborhood of 100 basis points annually."
More Behaviour: You can change
The cost of bad behaviour

The Stingy News Weekly: June 4, 2017
06/04/17 7:40 PM ESTSNW
This week we have guessing, bubbles, changing marshmallows, Chilton, and more.
More SNW: The Stingy News Weekly: May 28, 2017
The Stingy News Weekly: May 21, 2017

You can change
06/04/17 7:30 PM ESTBehaviour
"The marshmallow test became the poster child for the idea that there are specific personality traits that are stable and consistent. And this drives Walter Mischel crazy. 'That iconic story is upside-down wrong,' Mischel says. 'That your future is in a marshmallow. Because it isn't.'"
More Behaviour: The cost of bad behaviour
Our world outsmarts us

Dave Chilton interview
06/04/17 7:13 PM ESTMarkets
"We discuss business, investing, and writing." [audio]
More Markets: Revenue per employee
Michael Mauboussin interview

High yield becomes low yield
06/04/17 7:08 PM ESTBonds
"Fast forward to today and we have reached the opposite extreme, with European junk bonds at an all-time low yield of 2.67%."
More Bonds: Be wary of junk bonds
What 2 years of negative rates tell us

The new normal
06/04/17 7:00 PM ESTReal Estate
"These days, the average home price is between seven and eight times income. To return to the ratio of the 1980s, the average household income has to jump to $160,000, or home prices have to fall back to $460,000."
More Real Estate: Too much housing
Fortress fails to silence critic

Marc Andreessen interview
06/04/17 6:59 PM ESTEconomy
"The kicker to the whole thing, back to your question, is the sectors where prices are crashing by definition are shrinking as a percentage of the economy and the sectors where prices are rising are growing as a percentage of the economy, and so what's actually happening is the sectors where tech is not having a big impact are growing and will eventually be the entire economy. So TVs are going to cost $10 and healthcare is going to cost $1 million. This is where this is all headed. As a consequence, jobs, the answer is we are all going to employed in healthcare and education which is actually what's happening."
More Economy: Too much versus too little dynamism
Productivity slowdown

A long-term return guess
06/04/17 6:54 PM ESTStingy Investing
"Afterwards I was asked what my expectations were for the market, and the couch potato portfolio, over the next 10 years, or so. It's an interesting question and one that investors would love to know the answer to - both in advance and with certainty. Alas, it is something that I'm less than certain about. But I can try to entertain you with a few wild - or at least somewhat educated - guesses."
More Stingy Investing: Branching out in search of value
Chasing dividend growth

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