Investing Lessons From Ted Williams

Fat PitchBaseball is one of the few sports where you can fail 70% of the time and still have a great year. Players are paid millions who do just that. And the mutual fund industry follows a similar model. But I digress.

Only 13 MLB players have breached the .400 barrier since 1900. In 1941, Ted Williams hit .406 while the league average was .262.  He was the last to do it. He was one of the greatest hitters ever. His tireless work ethic, obsession for hitting knowledge, and discipline got him there.

Over time, Williams simplified his batting process down to only swinging at good pitches he could hit. He stacked the odds in his favor.

First You Need a Good Ball to Hit

Always a fan of analogies, Buffet uses Williams’ process to explain his investment philosophy: Continue Reading…

Happy Hour: One Foot Out The Door

Welcome to the end of the week! Just sit back, relax, and enjoy this weeks roundup in another edition of Happy Hour.

One Foot Out the Door

Gallup started the week off with an eye-opening poll showing just how excited the average person is about the stock market. They’re not!

After the S&P gained 16% in 2012, followed by 32% in 2013, you’d think those returns would induce chasing. Guess not. Of course, only 7% of those polled actually knew the market was up 32% last year. Continue Reading…

Wild West Investing In Frontier Markets

Frontier MarketsTales of the wild west were a glamorized version of reality. Stories told of great wealth of land and opportunity, but forgot to mention the hardship, the risks. Frontier markets are much the same.

Frontier markets are a subset of emerging markets. It’s made up of countries in the very early stages of economic development. But it also includes countries with limited stock markets (small number of stocks, shares, and market cap) and small economic footprints. In total, frontier markets make up a sliver of the global market value. Continue Reading…

Happy Hour: Fun With Numbers

Welcome to the end of the week! Just sit back, relax, and enjoy this weeks roundup in another edition of Happy Hour.

Fun with Numbers

It’s funny how taste tests always seem to go in Coca Cola’s favor. Unless it’s for Pepsi, then Pepsi wins. Somehow the same number of dentists recommend Crest and Colgate!? And 9 out of 10 doctors always seem to agree too. Your mind thinks 90%, but is it really? Maybe only 10 doctors were asked. And what’s up with that one dissenter?

Advertisers love to throw overwhelming numbers at your face to get you to buy in. This happens with investment products, too – like the battle between index versus managed (active vs. passive) funds. Continue Reading…

Why REITs Performed Great Since 2000

Asset Returns ThumbSome questions and comments popped up about REITs since I introduced the table on asset class returnswhy did REITs perform so well the last 15 years? Others saw REITs on top eight out of fifteen years and concluded it must be the best investment going forward (despite me pointing out the failings of that conclusion). I thought I’d find the answer.

From ’00 to ’14, REITs blew away other asset classes with a 12.9% annual return. Before you start drooling over that number, remember how REITs work. While you get those juicy returns, you also get the tax consequences.

REITs avoid a big chunk of corporate taxes by paying out most of its income through dividends. In return, REITs have their own tax rules which are passed down to you (dividends are taxed as ordinary income). Continue Reading…