All Posts By

Jay Weinstein, CFA®

one thing market almost never does

The One Thing the Market (Almost) Never Does

By and Blog
Amid the seemingly endless volatility in the U.S. stock market, it may surprise you to know that we have a pretty good idea of what the returns will be from it. Now before you declare us out of our minds (there’s lots of other better evidence for that), notice that we carefully omitted any mention of a time frame in the previous sentence. But the truth is, we have a pretty good idea of what will happen over the next 30 years or so. We have a long data history that tells us that the S&P 500 averages between 9-10%…
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inflation

Puncturing Inflation

By Blog
“We don’t really know what it is, we don’t really know what causes it, we don’t really know how to measure it, but we really know we’re worried about it!” The stock market is never happy unless it has something miserable to complain and worry about. Having moved on incredibly quickly from a worldwide pandemic, the chattering investor classes have retrained their sights on that old 1970s bugaboo, “inflation.” As you can tell from the cumbersome subtitle, inflation is the most confusing and misunderstood investment concept that we think about. Every policy maker, every economist, and every investor has a…
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dow 36000

Dow 36,000 Revisited

By Blog
On October 1, 1999, in the midst of the tech stock mania of that era, James K. Glassman and Kevin Hassett published their notorious book, Dow 36,000: The New Strategy for Profiting from the Coming Rise in the Stock Market. When the tech bubble burst the next March, Glassman and Hassett became the butt of many jokes for the audacity and timing of the book. In full disclosure, I know and like Jim Glassman and he has been very kind to me in my career; but Jim and Kevin forgot a seminal piece of old Wall Street wisdom – it’s…
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recession

2019 3rd Quarter Commentary: “The Recession is Coming! The Recession is Coming! What is a Recession Anyway?”

Market Commentary
One of our least favorite things about investing is the remarkable imprecision of language. There are so many terms like "risk," "momentum," "smart beta", and "asset class" (among many others) that have no precise definition-- and yet, everyone assumes they know what those terms mean. We were thinking about this recurrent complaint while being barraged with articles and narratives about the inevitable coming "recession." While we don't want to seem callous, our concern is with the effect of a "recession" on portfolio returns, not the actual economic effects. Assuming the next "recession" is more of the garden variety and not…
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yield curve

The Yield Curve: An Imperfect Indicator in Evolving Market Conditions

By Blog
The U.S. Treasury Yield Curve inverted recently for a few days, which provoked hand-wringing and doomsday predictions from all the usual market commentators in all the usual places. So let's examine this phenomenon, starting with the simple question: What is an inverted yield curve anyway? An inverted yield curve is simply the unusual case of short-term interest rates being higher than long term.  Under normal circumstances, you wouldn't lend money to anyone for a longer period at a lower rate - it just makes no sense. That's why inverted curves don't happen very often. But all yield curves are not…
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end life planning

Pearls of Wisdom: A Retrospective on 30 Years of Professional Investing

By Blog
On July 1, 1987, I started work as an investment advisor. Frankly, I wasn’t too happy about it, having planned on taking the summer off after graduating from business school. The Dow Jones Industrial Average was at 2,418.53, and the S&P 500 was at 302.94. The 30-year Treasury rate was about 8.75%. Those numbers are not typos, if Google is telling me the truth. Of course, we didn’t even have PC’s on our desks, and Google was a noise you made when trying to entertain a baby. In fact, Larry Page and Sergei Brin were both just 14 years old.…
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