“Why do people love dividends? Because they don’t understand either corporate finance or taxes.”

Slowly but surely the world is waking up to the silliness of just focusing on dividends in isolation. (via YCharts (via Aleph) that also has a Net Payout Yield screener.) "Why do people love dividends? Because they don’t understand either corporate finance or taxes." Dumb Idea: Dividends Are Good For You Cashing In On Stealth Dividends

Stock Valuations and Inflation

I'll be updating the country CAPE values at the end of the quarter, but I thought this examination was really interesting.  Earlier this week we talked about how the US was allowed to have a higher CAPE valuation due to low inflation.  The question then arose from readers, should we be making adjustments for CAPE values based on inflation...

Cyprus : The Key is a Long Term Time Horizon (aka Buy and Hold This)

Nothing like a 99% drawdown (if/when the market reopens) to rattle the nerves of a buy and hold apologist.  Remember, just tell the local Cypriot that they need to just hold through this downturn, and return 10% a year for the next 40 years to breakeven.  Remember to have a long term perspective, that's what's important here!  Stocks are...

First Q in Review

I know the first quarter isn't over yet but I have some other things on my plate this week.  Below are 10 broad ETFs and their return for Q1 (that despite all of this Cyprus hand-wringing was a fantastic quarter for US Stocks).  

Asset Allocation Strategies

I'm doing a white paper/blog posts (or book depending) on some of the most popular asset allocation strategies.  Below are a few we are going to write about....any good ones I'm missing? Strategic  60/40 Equal Weight Coffee Can Tobias Bernstein Endowment Norway Minimum Variance Permanent Risk Parity (All-Weather)      

Five Million Dollar Investing Ideas (Part 5/5), Best Ideas/Emerging Managers Newsletter

5.  Investment newsletter focused on Best Ideas.  Each month interview a hedge fund or other manager and outline their 1-3 best ideas.  Manual of Ideas does this a bit with their online conferences, and I know periodically Barron's does their roundtable, Private Investment Brief is a spinout of Santangel's, and SumZero or VIC have private networks where people volunteer their ideas. But...

How to Get Compustat Backtesting for Cheap

I used to use Portfolio123 years ago but stopped since they didn't include dividends.  And not including dividends is like having a car with no engine.  I was pleasantly surprised to see they have now integrated S&P Compustat (which along with FactSet are the two best institutional quality backtesters but both cost well over $50k per year).   Worth checking...

Why We Moved to Premium

I received a lot of emails from readers on the shift to a premium offering, so I thought I would summarize the why and the what.   The What 1.  If you subscribe to MFR or Idea Farm you will get first look at our publications, including the recently completed QTAA paper 2012 update. 2.  You get a free copy of all upcoming...

The Two Biggest Threats to the Equity Rally

I'm pretty bullish on stocks right now.  Global valuations are cheap, although the US is one of the top 4 most expensive markets on a 10 year CAPE basis.  But right now, the US is allowed to be expensive. Below are the two biggest threats to the equity markets.  Let me explain: 1.  Inflation mountaintop. When inflation is tame countries are rewarded...

Blood in the Streets (or, Why Investing in Low CAPE Works)

People often ask me why we use 10 year inflation adjusted PE ratios rather than simple trailing 12 months.   Below are two charts that I think are at the crux of the arguement, and basically visually demonstrate why CAPE works.   0.75 correlation for CAPE, and only 0.24 correlation for TTM PE.  The below basically shows that CAPE correlated highly with...