CFA South Florida’s Member-Promotion Video Release

I was happy to participate in this video production (make sure your YouTube settings are on HD for the best experience).

I have come to know the participants in the video as outstanding individuals, who volunteered their valuable time to promote the CFA Charter and the Members of the CFA Society of South Florida. The video is already being viewed in Charlottesville as an “inspiration” for… Continue reading

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Profoundly Unpopular: Finding Bargains Among the Unloved or Unknown

Jason Zweig has produced another excellent column exposing truths that hide in plain sight. If you want to buy a dollar of free cash flow for less than one dollar, you are probably not going to find it among the companies that everyone wants to own. Instead, you will need to hold your nose and pick among the “profoundly unpopular” and hold on (or buy more) when they… Continue reading

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The Market Return Histogram through 2014

The S&P 500 Index delivered a 13.69% return in 2014 as the market continued to reach new highs after reaching new highs in 2013. This year, for the first time, I have highlighted the years corresponding with the inflation and bursting of the DotCom bubble (grey) in addition to the Great Depression (yellow)… Continue reading

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Is Your Adviser a Fiduciary?

Answer: Probably not, if your adviser is a broker (AKA a “Financial Consultant” or “Financial Adviser” employed by a brokerage firm).

“Brokers, like those at the Toffels’ bank, are technically known as registered representatives. They are required only to recommend “suitable” investments based on an investor’s personal situation — their age, investment goals, time horizon and appetite for risk, among other things. “Suitable” may sound like… Continue reading

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Truly Honored by Jason Zweig’s Selection of this Blog

I am truly honored to have been selected by Jason Zweig of the Wall Street Journal as one of a handful of investors that Jason thinks are “Smart People for Investors to Follow.” This Margin of Safety blog can be found on Jason’s list between Warren Buffett’s Letters and Memos from Howard Marks, so I have good reason to feel honored.

Readers of my blog know… Continue reading

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B. Malkiel Cannot Believe His Own Eyes

“Over the past 100 years the returns from smaller companies have exceeded those of larger companies. It is also true that stocks with low valuations (i.e. lower prices relative to earnings and book values) have generated better returns than those with high valuations. What is less certain is whether these tendencies will continue in the future…”

–Burton G… Continue reading

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Contemporary Art Auctions Reach Records

Liquidity, both physical and financial, tends to take the path of least resistance.

If it is easy for corporations to borrow in public debt markets because high liquidity keeps interest rates low (in the near term), corporations that lack ideas for expansion at high ROI will issue debt and use the proceeds to buy back equity or go on M&A sprees. Those purchases raise the price of equities regardless of… Continue reading

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“Continued Signs of Financial Market Excess”

From a report on CNBC.com (http://www.cnbc.com/id/102009066):

“There was one additional dissenter for the September statement. Philadelphia Fed President Charles Plosser voted against the position in July, and he was joined this month by Dallas Fed President Richard Fisher.

‘President Fisher believed that the continued strengthening of the real economy, improved outlook for labor utilization and for general price stability, and continued

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There was No “De-Leveraging”

Ray Dalio of Bridgewater is fond of calling our government bailout a “beautiful deleveraging” (http://www.bwater.com/Uploads/FileManager/research/deleveraging/an-in-depth-look-at-deleveragings–ray-dalio-bridgewater.pdf) probably because he bet correctly that the flood of liquidity would lift all boats in the short run. But, I have been arguing the point in the attached blogpost from BlackRock since the crisis began. The growth in total debt is a major long-term problem that few have sufficiently considered. It will be… Continue reading

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Bloomberg Article on the Myopia of Buying a Vacation Home

When viewing a vacation home as an investment, most fail to account for all of the costs associated with home ownership. Even after the investment is sold, people overestimate their return because they fail to track all of the costs.

In most cases, residential investments deliver net returns equal to the rate of inflation, at best, and that does not factor in the amount of time the homeowner spends… Continue reading

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