1. Wednesday, July 23rd, 2014
    you get the market

    The debate between the believers in passive investment management and the believers in active management is destined to go on ad infinitum.  But the simple truth is that they are much more alike than different in terms of results.

    To simplify things, let’s look at the stock market, specifically the U.S. stock market.  For investment professionals, the “market” has long since meant the S&P 500, although there are other measures that capture more of the market than it does.

    The market thus described is weighted by capitalization and serves as the benchmark for huge numbers of active managers who are generally judged and rewarded (or not rewarded) based upon their relative performance versus that benchmark.  The active/passive debate revolves around which of those approaches is likely to produce better returns over time.  There are other issues — including the wisdom of spending gobs of time and money trying to outperform when history appears to not be on ... continues

  2. Saturday, July 12th, 2014
    evolutions and revolutions

    I spent ten days in the Pacific Northwest recently.  The trip included presentations to the CFA societies of Seattle and Portland, as well as some meetings with investment organizations in those cities.  But there were also mountains and coastlines and high deserts and big rivers — and family events, cultural experiences, and an old-fashioned Fourth of July celebration with a big parade and fireworks.

    For me, as for most people, inspiration usually comes when I have been stretched by a new experience, whether I realize it at the time or not.  My trip was a visual and conceptual feast, starting within a few minutes of arriving in Seattle, when I looked at nine LPs arrayed on a wall in an exhibit at EMP Museum:jimiIn order, they were Sgt. Pepper’s Lonely Hearts Club Band (The Beatles), Sound of the Sitar (Ravi Shankar), The Real Folk Blues (Muddy Waters), John Wesley Harding (Bob Dylan), Blues Breakers (John Mayall, with Eric Clapton), The Free Spirits, The Messiah (by ... continues

  3. Wednesday, June 25th, 2014
    cover bands

    These days, many of us are “accidental creatives,” thrust into roles in the information economy in which we are judged by our ability to produce unique ideas.  However, we are often quite unprepared for those roles, lacking the training and processes of traditional creative types and working within organizations which haven’t been structured to foster our development or success.

    Todd Henry’s book, “The Accidental Creative”Accidental Creative | Here is information about the book on the website of Henry’s organization that bears the same name. (recommended to me by Sophia BeraGen Y Planning | This is the site of Bera’s financial planning business, which is focused on Generation Y.), is a how-to for those of us that find that the creative well can run dry at just the wrong time.  It offers suggestions for structuring your work and personal lives to keep coming up with those fresh insights.

    I can safely predict that most investment ... continues

  4. Wednesday, June 11th, 2014
    the nature of value

    When I travel, I try to meet with people and organizations from different parts of the investment world — to learn their stories and to exchange ideas.  Those meetings foster fruitful relationships and spark new areas of pursuit (intellectually and professionally).

    One of the most engaging of those conversations was with Nick Gogerty in a university club (to which neither of us belonged) in New York City.  I was amazed at the number of interesting concepts that we touched upon in a relatively short period of time.  Many of them now appear in Gogerty’s new book, “The Nature of Value.”The Nature of Value | As of this writing, the book is available for pre-ordering.  I read an uncorrected proof in advance of publication.

    There is so much in the book that this short review will hardly do it justice.  The title and the subtitle (“How to Invest in the Adaptive Economy”) get at the overriding theme:  the adaptations of value and of biological life ... continues

  5. Monday, June 2nd, 2014
    raw material

    If I tallied all of my words during the last year, a good percentage would concern the burgeoning retail alternatives businesstjb | This is the gateway to my sites (and you can find a link to my ebook there too). — and that hot area has shown up in my work with consulting clients and networking with investment decision makers at a variety of organizations.  Plus, it serves as a stellar example of the migration of ideas across what I call “the investment ecosystem” (more about that concept in coming weeks).

    The alternatives meme has grown into a generalized and often ill-defined need for exposures that are “not bonds” and “not stocks.”  There are debates about how much to have in alternatives — as if “alternatives” were one thing — and whether a retail investor should have any exposures to them at all or quite a load.

    Alternatives are most assuredly not one thing.  A range of strategies that have been available to ... continues