Markets are not (very) efficient

In my years as a college professor, I had more than a passing acquaintance with general investment theory.  I was interested in the subject, and did well with my personal account.  Despite this success, I believed that markets were efficient.  The Efficient Market Hypothesis had gained credence in academic circles, was taught in classrooms, and […]

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An Interesting Week

Most of the writing I do is on sites exclusively for clients.  This is especially true for the analysis of specific stocks.  Sometimes a theme is also suitable for "A Dash," and tonight is such an occasion.  So here is part of my nightly investor commentary, omitting our daily result and position discussion. CNBC just […]

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What’s Going On?

Since the Fed decision to increase interest rates on May 10th, the market has taken a completely different character.  The Fed did not signal that a pause in the rate hike regimen was imminent, leaving the door open for policy flexibility.  Some market participants interpreted this to mean that the Fed was going to kill […]

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Using Forward Earnings

We have noted the poor fit — both descriptive and prescriptive — of using backward-looking earnings as a valuation measure.  Let’s consider a look at forward earnings.  The chart here shows Thomson First Call forward earnings versus the yield on the ten-year Treasury note.  It is a simple method, testing the idea that investors look […]

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After the Fed

What will happen when the Fed is finished with the tightening cycle?  To get a dash of insight, take a look at the Fed Funds rate over time. When trying to predict something, you want to look at similar instances in the past.  There is a piece of research from a big-time firm that is […]

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