These articles appeared between February and April 2011:
On the Percentage of Market Cap held by Domestic Stock ETFs
Implications
- Domestic stock ETFs tend to pick more volatile stocks.
- Domestic stock ETFs tend to pick stocks held by major institutions.
- Domestic stock ETFs tend to pick stocks less held by insiders.? (They tend to be more boring.)
Bear markets move at 1.9x the rate of bull markets. (double speed)
Consider the Boom in the Bust; Consider the Bust in the Boom
We would all be better off if policymakers thought at least half a cycle ahead in the credit cycle. Sadly, they are linear thinkers, and would be better off working at the county landfill, if they qualified for such authority.
Critical Analysis of Buffett?s Annual Letter
Critical Analysis of Buffett?s Annual Report
Analyzes Berkshire Hathaway in 2011.? Points at the growth in debt at BRK, and concentration risk in the subsidiaries.
Why you should not use yield as a criterion for investment.
On the Usefulness of Yield Spreads
So what does this tell us?
- There is a credit factor that effects yields, and the effect on Baa bonds is roughly 1.5x that of Aaa bonds.
- As Treasury yields get lower, Baa bond yields rise at roughly 45% of the rate.? There is the nominal yield need ? even Baa bonds tend to need a certain nominal yield, particularly for 20+ year bonds.
- Present yield levels are fair for long Baa bonds, to the extent that Moody?s measures them accurately.
So avoid complex investments.? Particularly avoid investments that you don?t understand.? At minimum, find a competent friend, or some neutral party that will look at the deal.? If you can?t find such a friend/party, don?t do the deal.? The friend is important, because he does not want you to come to harm, or lose you as a friend if things go bad.
There are real advantages to managing for the intermediate term.
Why I started a bond product.
Things are not as good as they look
Analyzing economic statistics when they don’t sound right.
Limits: Models, Governments, and Central Banks
Most writers say the governments and central banks are all-powerful.? I disagree, and I try to explain why.
The growing sentiment, though ahead of the crowd, that David Sokol should leave Berkshire Hathaway.
Everything Old is New Again in Bonds
On unconstrained mandates and managing for total returns with bonds.
What I went through in investing in my younger days.? Taught me a lot.
When Everything is Strong, Redux
When the only thing weak is high quality bonds, what do you do?
It Would Have Happened Already, Redux
What do you do when all you hear are consensus opinions?