Performance of US Profitable Value vs Growth (With Low Profits), 1963-2020

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Not a month has passed in the past three years when I haven’t had at least some conversational debate on the value vs growth styles of investing. I often emphasise the importance of not seeing value as the opposite of growth (it is just as possible to buy growth at a reasonable valuations as it […]

JP Morgan Large Cap Growth vs Small Cap Value 3×3 Grid, July 2020 edition

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One tweet I found worth sharing today was this one by @NateGeraci showing JP Morgan’s 3×3 grid of past performance and current P/E ratios of large caps vs small caps and growth vs value stocks. Fans of Morningstar will be very familiar with the 3×3 style grid idea from there, and I have also written […]

Long-term, valuation is all that matters

Posted Leave a commentPosted in Investing

I recently found some charts on this tweet thread worth checking against some of my earlier posts on investing with a value tilt. These are similar to my earlier chart about forward 10 year investment returns versus on CAPE ratio, and can be summarized in the title of the first chart “Long term, valuation is […]

Expected Return of Stocks and Bonds vs CAPE Ratio

Expected Return of Stocks and Bonds in One Simple Chart

Posted Leave a commentPosted in Charts

One of the most frequently asked questions I am sent is “what is the rate of return I should expect when I invest in the market”? With bonds, it is fairly easy to see that a short-term US Treasury note bought with a yield of, say, 2%, will return you 2% per year if held […]

Turbulence vs damage

Turbulence vs Damage in Stock Investing

Posted Leave a commentPosted in Charts, Investing

I have no experience piloting airplanes, and admit there have been several times as a passenger that I have been afraid of turbulence. What helps me stay calm in turbulent flights is remembering descriptions I heard from at least one pilot interview on how insignificant most turbulence is compared with how high the plane is […]

Value like it’s 1999

Posted 1 CommentPosted in Charts

40 years ago, in 1979, BusinessWeek published its now infamous cover “The Death of Equities“, after one of the worst decades for US stock investors over the past century. 20 years ago, in 1999, the Nasdaq was still soaring on the back of a .com technology stock bubble just as famously burst the following year. […]

Vanguard Growth Underperformed the S&P 500 Over 40 Years

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Following the last post’s chart showing how 75% of the returns investing in the S&P 500 came from dividends, this chart by how much Vanguard Growth Underperformed the S&P 500 over the past 40 years. Not only did the growth fund provide turn an investor’s 1980 $100 into a significantly lower sum ($2,222 vs $5,280 […]

US Index Funds adding shares to loss-making Uber and Lyft

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While there is a lot of merit to simply investing in a broadly diversified portfolio of low cost index funds, market cap weighted index funds have some features (or flaws, depending how you see it) that drive me to alternatives. One key example is this recent WSJ story highlighting how US index funds are about […]

How to beat the market: 3 factors of recent outperformance

How to beat the Market: 3 Factors of Recent Outperformers

Posted Leave a commentPosted in Investing

Perhaps second to the absolute question of how to make money in the markets, I am next most often asked if and how it is possible to “beat the market”.Β  When asking “how to beat the market”, one also needs to answer two parts of that question: “what do you mean by ‘the market’?”, and […]

Buffett on Kraft-Heinz

Buffett’s $2.7 billion loss on Kraft-Heinz

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Anand and I are long time fans and students of Warren Buffett. The recent news that the legendary investor’s firm Berkshire Hathaway lost $2.7 billion last month on their stake in Kraft-Heinz did not reduce my respect and admiration of his wisdom by even one bit, but of course drove me to ask how I […]