Stock buyback programs are a method of returning profits to shareholders without causing a taxable event.
The average holding period for a stock is not simply the inverse of liquidity.
Since only a small portion of stock is traded each day, a large majority of shareholders prioritize the long term appreciation of the value of the company.
Bonds are like the iron rods put in the bottom of sailing ships. They don’t make the ship go faster, but they do keep the ship from capsizing in stormy weather.
At best, the Sharpe Ratio is a single hard coded straight-line preference curve, and the portfolio with the highest Sharpe Ratio is not necessarily the one which will give you the best chance of meeting your goals.
There is no such thing as a risk-free, guaranteed investment. Everything has risks.
We don’t normally recommend being on margin, but we recommend having the option in case it is needed.
Beware the turnover rate. It’s much wiser to invest in funds managed by people you trust.
The correlation between two investment is used in portfolio construction and rebalancing.
P/E ratio tells you how many dollars you have to invest to receive $1 in earnings.
As Hedge funds grow in popularity, beware of following the lemmings.
ETFs combine tax efficiency with low expenses.