«S&P 1500: That’s Goldman’s brand new end-of-year forecast for the market, representing a 13.9% increased from where things stand right now.»
RMore about the Business Insider’s Chart Of The Day here.
- Monday, March 21st: Existing home sales.
- Wednesday, March 23st: New home sales.
- Thursday, March 24st: Durable goods.
- Friday, March 25st: Final estimate for Q4 GDP.
Full schedule of the coming reports from Calculated Risk Blog here.
The natural gas market is continental, but for oil, demand is global.
Story from NY Times here.
Click x2 for a larger version
More about the world’s wealthiest persona and his business entourage on his Forbes profile here.
«If economists can’t predict the future, why do they always predict that the economy will grow about 4%? Because that’s what the economy’s long -term growth average is- and, therefore, that’s the prediction that gives the economists the best odds of being generally “right” (or at least not too embarrassingly wrong).»
Burton Malkiel, Princeton economics professor and author of the legendary book A Random Walk Down Wall Street, hasn’t changed his investment advice since the first edition in 1973:
Spread your investments among various asset classes and countries; keep fees low; and favor index funds over active managers who claim they can beat the market.
This is from a teriffic interview with Malkiel on investing - Excerpt:
«You’ve long been an advocate of index funds, but I keep hearing people say this is now a “stockpicker’s market” that favors active managers. They say the concept of buy-and-hold investing is obsolete.
I don’t think the data show that. Two-thirds to three-quarters of active managers are beaten by a low-cost index fund. And the one-third or so who may win in one year are not the ones who win in the next year. The old lessons are not dead. When you try to time the market, which many people do, you’re more likely to do it wrong than right. If you were diversified with the asset classes I recommended, you actually just about doubled your money even in this horrible lost decade.
Everybody says we know diversification doesn’t work. When all hell breaks loose—as it did in late 2007 and 2008—everything goes down together. That still doesn’t negate the idea that you’re better off being diversified. In 2008—this horrible year when everybody lost money—you made between 5 percent and 6 percent in a total bond market index.
So the key arguments of Random Walk haven’t changed. But what is new about the 10th edition of the book?
Nobody can market-time, but once a year I suggest that one rebalance. [Rebalancing is adjusting a portfolio's mix to certain preset benchmarks, often by selling assets that have gained value while buying those that have lagged.] I’ve got an increased appreciation of rebalancing and have done a lot of work on it. It won’t always give you an extra return, but in volatile markets it will keep your risk low or consistent with the [level right for you]. And in very volatile markets, it will tend to increase your returns.»
About the Joy Of Stats [via YouTube]:
Documentary which takes viewers on a rollercoaster ride through the wonderful world of statistics to explore the remarkable power thay have to change our understanding of the world, presented by superstar boffin Professor Hans Rosling, whose eye-opening, mind-expanding and funny online lectures have made him an international internet legend.
So if you have 60 minutes to spare; Enjoy!
According to BusinessWeek: the next two years will be the best in living memory for many wealthy Americans to shield their income and fortunes - if the new tax cuts become law.
Tax reform coverage here.
When an overdose politics contol the market:
[via Kids Prefer Cheese]
The chart above is from The Big Picture and shows 12 years of the S&P500.
“The fee-driven industry continues to push buy & hold as the investing strategy of choice. I prefer to adjust my risk exposure relative to multiple inputs, one of the major aspects of which is Trend.”
You find Ritholtz full comment here.
“As well as ticketing you when you run through a speed-radar too fast, the “Speed Camera Lottery” in Sweden also notices you when you come in at or under the speed-limit. It then automatically enters you in a lottery. And here’s the really smart part: the prizes come from the fines paid by speeders.”
Average speed before the experiment: 32 km/hour
Average speed after the experiment: 25 km/hour
Spain and Ireland to auction off state businesses in bid to calm markets.
Coverage from the Telegraph here.
Here is Ritholz of The Big Picture blog’s opinion on about these four hierarchical elements:
Data: Data is the raw building blocks; it consists of raw numbers, but lack context or meaning. 1,200, 9.6%, and $170k are all piece of data.
Information: Is the application of structure or order to data, in an attempt to communicate meaning. Knowing the S&P500 is at 1,200 (up 5% YTD), Unemployment is at 9.6% (down from 11%), and GDP is 2.5% (revised from 2%) are examples.
Knowledge: An understanding of a specific subject, through experience (or education). Typically, knowledge is used in terms of a persons skills or expertise in a given area. Knowledge typically reflects an empirical, rather than intuitive, understanding. Plato referenced it as “”justified true belief.”
Wisdom: Optimum judgment, reflecting a deep understanding of people, things, events or situations. A person who has wisdom can effectively apply perception and knowledge in order to produce desired results. Comprehending objectively reality within a broader context.
I notice that some traders have a hard time discerning between different aspects of the intelligence hierarchy. They obsess about data, but get lost in it. losing the ability to create context and meaning. They have information, but they lose site of its meaning with the broader context. Even some folks with knowledge fail to apply it appropriately.
Chart from Information is Beautiful.