Disproportionately, value managers are buyers of financial stocks. This is a result of index construction, because financials trade at relatively low multiples of book value. Financial stocks led the rally from 1987-2007, and...
Read MoreThe world yearns for debt relief. There are many debts that will not be repaid at face value. Better to recognize those realities now, and seek a compromise. What’s that, you say? Banks that lent the money won’t...
Read MoreWhen I manage money for my clients, my own money is on the line along with them. That’s the way it should be. I try to give clients a clone of my portfolios whether on bonds or stocks. This aligns my interests with theirs,...
Read MoreI’m not an expert on game theory, but the rule of thumb I have run across is to win in games with more than two parties, you must assemble a coalition that has more than 51% of the aggregate power within the game....
Read MoreChinese Capitalism isn’t magic. Some parts are a little sketchy. There are several difficult to sustain aspects of Chinese economic/financial policy. 1) The banks are basically extensions of the Chinese government. 2)...
Read MoreEquilibrium is a concept that economists believe in so that they can get their easy math to work, so they can publish. The truth is that the economy and financial markets are always outside of equilibrium. Capitalist economies...
Read MoreI’m working on my quarterly reshaping — where I choose new companies to enter my portfolio. The first part of this is industry analysis. My main industry model is illustrated in the graphic. Green industries are...
Read MoreThis piece should be short. I have heard otherwise intelligent people say that the economy can’t go into a recession because the slope of the Treasury yield curve is too positive. With the Fed trying to manipulate the...
Read MoreFT Alphaville had an article recently where they featured an academic paper Complexity, Innovation and the Regulation of Modern Financial Markets by Dan Awrey. It’s not a mathematically complex paper, though it deals with...
Read MoreWhen young couples come to me and say, “What should we do financially?”one of the first things I say to them is something like, “Build the buffer.” You should have 3-6 months of expenses saved up. I...
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