Insurance companies are disproportionately represented among the oldest companies in the world. John Hancock was founded in the 1860s. Cigna dates to the 1700s. Some are even older. Why is that? In my opinion, it’s because they employ a strategy called asset-liability matching. In simple terms, [...]
Cape fear
In the ongoing battle between those who believe that the stock market is in a bubble and those who do not, you may have heard mention of something called the CAPE Ratio. Among market indicators, this ratio has the strongest track record in predicting future market returns. What does the CAPE say [...]
Emerging consensus?
At 82 years old, investment manager Jeremy Grantham has seen his fair share of market cycles. And as a U.K. native now living in the U.S., he maintains a balanced perspective. In an interview last week, Grantham shared his unvarnished view of the U.S. market. “American capitalism has become fat and [...]
One feather at a time – continued
Last week, I talked about some of the unsettling trends in financial markets. In that article, I focused on the role of brokers and day traders and noted that it takes two to tango. But it turns out the dance floor is quite a bit more crowded than that. Yes, the brokers and the day traders are doing [...]
Too slow?
This week, I received an email from a reader—let’s call him Tom. He described his experience managing through this year’s unruly market. After the market dropped in February and March, he said, the equities side of his portfolio lost a lot of value. So he decided to rebalance his account—that is, to [...]
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