Smart Money

The Overstated Ills of ETF’s

Price Discovery, But Now With Fewer “Patsies” “If you’re playing poker for half an hour, and you don’t know who the patsy at the table is . . . it’s you.” –Warren Buffett As super-cheap exchange traded funds (“ETF’s”) proliferate, Wall Street is fighting back. The latest salvo:  a new academic paper suggesting that ETF’s...
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Is Housing More Bubble-Prone Than Stocks?

Shiller:  Why Smart Money Can’t Stop a Housing Bubble At least according to economist (and Nobel Prize winner) Robert Shiller, housing is more prone to bubbles than stocks for two reasons:  1) housing supply eventually responds to higher prices, satisfying demand (and then some); and 2) unlike stocks, it’s not possible to short housing —...
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“Will the Last Active Investor Please Turn Out the Lights?”

Indexing’s Looming “Free Rider” Problem “If you’ve been playing poker for a half-hour, and you don’t know who the patsy at the table is . . . it’s you.” –Warren Buffett “Index funds run by Vanguard see record inflows as savers turn to autopilot.” –“Investors Shun Stock Pickers”; The WSJ (1/5/2015) I’m a long-time fan...
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Risk of Bad Statistics: 99.7%

That’s One Awfully Clear Crystal Ball Smart Money magazine is running a piece (“Fishing for Housing Bargains“) that profiles six housing markets nationally that now appear to be attractively priced. To support that claim, the article purports to calculate the “risk of price decline.” The risk ranges from 3.1% for Omaha, to 25.4% for San...
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