I stand out on the Aptus team for having not played major college basketball, but as an avid fan I can at least contribute to the banter. Complementing the content put out by my playing partners at The Backcourt Report, I periodically share my “Starting Five” posts highlighting the best I can find in the areas of investment management, behavioral finance, and the advisory business. Enjoy, subscribe, share!
Making Private Public: thoughtful piece from Michael Batnick discussing the changes in the initial public offering market over the past couple of decades. No denying that today’s companies are staying private longer; whether this is starving the public of home run opportunities is another matter. Great collection of data and graphics, fun read about the few winners and many losers in IPOs.
New Way to Play FANG Stocks Falls Short for Some Investors: painful to see but not surprising, money-center banks are taking advantage of hot performance to “help” investors more efficiently participate. As you can predict, this is a money-maker for the banker not the investor.
Bill Gross’s Losses Mounted in First Half After Loading Up on Futures: another painful but unsurprising read, as the “bond king” took his unconstrained mandate and made a desperate bid to stay relevant. Unfortunately, we’ve seen these things play out before as intelligence meets market reality, with the introduction accelerated by leverage.
A Trend Equity Primer: really thorough piece on trend-following from Corey Hoffstein. The math can get really wonky, but I love his description of why trends exist: “Behavioral theory suggests that investors anchor their views on prior beliefs, causing price to underreact to new information. As price continues to drift towards fair value, herding behavior occurs, causing price to overreact and extend beyond fair value. Combined, these effects cause a trend.”
Financial Advisor Success Requires Just 50 Great Clients: no one breaks down the obstacles and opportunities facing advisors like Michael Kitces, and this is another example. He lays out the case for fewer, deeper relationships, and illustrates with great detail exactly how an advisor can have a happy, meaningful, profitable practice if she is methodical in accepting only the right clients. A master class in the economics of our business.
Hope you enjoy this edition of our Starting Five, join the updates here!