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 Leave a 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

Posted Leave a commentPosted in Charts

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

Posted Leave a commentPosted in Investing

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”.  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

Posted Leave a commentPosted in News

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 […]

2019 Country valuation dashboard

2019 Country Valuation Dashboard

Posted Leave a commentPosted in data

2019 is a good year to start off with a country valuation dashboard, given how most of 2018 was a story of US stocks outperforming most other countries’ stock markets, at least until December.  Despite last month’s correction, US stocks remain relatively expensive compared to most other countries’ markets, with the US S&P 500 still […]

International Investing 2019: Some Country Stats

International Investing 2019: Country Stats

Posted Leave a commentPosted in Investing

Here is a table listing some of the best performing and worst performing country stock markets as of the beginning of December 2018, with the first two columns showing 2018 year-to-date and 3-year total returns by country respectively. The next two columns show Price/Earnings ratios and historical earnings growth statistics by country. I chose to […]

US Large Growth vs Small Cap Value, 1980-2018, by Russell Indexes

How to Beat the Market, Factor 3: Buy Small Cap Value, Not the Big “Glamour” Stocks

Posted 1 CommentPosted in Investing

For the third factor in this series, I wanted to highlight two of the most “classical” factors for classifying and selecting stocks: size (large vs small) and cheapness (growth vs value).  These factors were perhaps most famously identified by academics Eugene Fama and Kenneth French, and popularised in the 3×3 grid used by Morningstar to […]