April 2014

The IA 25 for 2014

I’m truly honored to have been named to Investment Advisor magazine’s 25 most influential people for 2014. As my friend Howard Lindzon once told me, being on a list is only meaningful if you respect the other people on it. In this case, I’m flattered to be listed alongside Michael Kitces, Tom Nally, Mary Jo…

RIP Record Profit Margins

The bear case is that profit margins for the S&P 500 – now pushing almost 10% – cannot possibly be sustained, let alone expand from here. And thus, the logic goes, falling profit margins cannot possibly be good for stocks. Unless they’re falling because companies are paying workers more and economic activity picks up to…

Time is a Flat Circle

“Someone once told me time is a flat circle. Everything we’ve ever done or will do, we’re gonna do over and over and over again.” – Detective Rustin Cohle, True Detective That’s the best show of 2014’s writer / creator Nic Pizzolatto borrowing an idea from Nietzsche – specifically the concept of Eternal Return. To hear Nietzsche tell…

Chart o’ the Day: Earnings Surprises by Sector

We’re through the big week of earnings season and Savita Subramanian’s Equity and Quant Strategy team at BofA Merrill Lynch have some interesting stats for us: 1Q14 Earnings Season: Week 3 With the conclusion of Week 3, 239 companies representing nearly 60% of S&P 500 1Q earnings have now reported. While analysts had gone into…

“the most important thing going on in global markets”

Via wknd notes by Eric Peters: Meaning: “I want to be long vol on the consensus that Chinese leadership is prescient, omniscient,” said the CIO. “I’m unsatisfied with Wall Street’s facile explanations for the Yuan devaluation.” Thursday’s move lower was the biggest in 5yrs. China’s grumpiest bears expect the worst-case outcome is a soft landing. “There’s…

Three Great Reads from the Weekend

‘Twas a quiet weekend here on TRB but I wanted to close it out with three great links you may have missed from my fellow bloggers. First, Ben Carlson explains that Buffett’s true advantage doesn’t actually manifest itself until the downside of a full cycle – so judging him during a five year bull market…

Shiller CAPE vs Implied Return

The site Guru Focus has a cool interactive feature that lets you pull your mouse across their charts for a better sense of the annual dance between PE ratio, CAPE ratio, interest rates and returns. Below is the chart of implied return from today’s valuation given the following: Shiller P/E Implied Market Return If we…

“Great Brands Impose a View on You”

Fortune Magazine’s cover story on Whole Foods this week rocks. I specifically loved reading about how the company fearlessly challenged the public’s misconceptions and opened a 21,000 square foot store right in the middle of Detroit – where almost half of the population lives below the poverty line. As the CEO of a newly-launched wealth…