This was a study conducted by Standard and Poors about a year ago. A little dated, but our previous post (“86 Percent of Americans can not answer all of these questions – can you?“) from 2012 is a post that still brings in a lot of traffic years later. So I wanted to continue the financial literacy theme with a newer study and newer questions. This study questioned 150,000 people across 140 countries.

 

How many could get 3 of the following questions correct? World wide? Just 33% could answer. Americans were slightly better, but still a dismal 57% pass rate. Here are the questions, along with a detailed explanation of the answers. How well did you do? Miss a few? No worries, at the end we explain the answers in detail to ensure you understand the topic. [click to continue…]

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It’s earnings season again, which means you are probably staring at a company or two in your portfolio that have seen their share price take a dive after reporting “disappointing” earnings.

 

You are not alone.

 

Here was the news the other morning after Warren Buffett’s Berkshire Hathaway reported earnings:

 

brk_earnings

 

Sounds bad right? Profit (Net Income) is down by a sizeable margin year over year for Berkshire.

 

Does this mean it is time to say goodbye to the all-star investor?

 

From those headlines it may seem so. But there is a lot more to a company’s financials than that headline earnings number. (Read to the end and find out how Buffett really measures the success of his businesses.) [click to continue…]

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Buffett sat down with David Rubenstein the other day for a great interview: [click to continue…]

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This was in Monday’s Wall Street Journal, it depicts the average investment asset allocation by generation:

 

wsj-aa-among-generations

 

The title of the article was “The Biggest Mistake People Make – Decade by Decade

And if you can’t tell from the picture alone, Millennial’s (and every other generation’s) biggest mistake is playing it too safe – allocating 70% (!) of their money in cash. [click to continue…]

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ben-gragam-fund-spotlight-banner

 

Our newest addition to our Fund Spotlight Series. Here we are building off of our Ben Graham Value Screen Series, and making those screens investable with just a click with the help of Motif Investing.

This is a collection of companies that most recently have passed Graham’s stringent value investing screen.

Of the whole investing universe, less than 25 companies make the list. What would Ben Graham buy today? this is probably a good start: [click to continue…]

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After hearing one too many comments from rational economists talking heads about how Hillary Clinton will “destroy small business” (and the stock market) or Donald Trump would “destroy America” (and the stock market) I thought it would be interesting to see how the stock market performed under various presidents in history. Before looking below, lets do a quick test. Who would you consider to be among the top few Presidents since 1897 (when this info-graphic starts)? How about the bottom few?

As the election wears on and rhetoric heats up, I see more and more political bias affecting investor behavior. So before you sell all your stocks once you see Hillary or Trump get elected, look below:

 

How did your picks actually perform?

[click to continue…]

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Ben Graham Value Screens Image

 

This is a continuation of our “Ben Graham Value Screens” series, where we look at investment opportunities based on the criteria that Ben Graham used and that is outlined in his (excellent) biography, The Einstein of Money.

 

Here we present the results from 2 different screens. Ben Graham’s “Defensive Investor” screen and “Enterprising Investor” screen. [click to continue…]

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by Unknown photographer, bromide print, 1933

Keynes may be the most famous name in all of economics. The term “Keynesian Economics” still fills headlines today as global financiers look for ways to restart economic growth.

But what you may not have known is that the same Keynes that created Keynesian Economics, is also responsible for some of the earliest thoughts on value investing, diversification and behavioral finance. [click to continue…]

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John Oliver hits it out of the park with his segment the other night on retirement plans. Specifically he covers the effect of high fees, conflict of interests with your financial advisor and even gives some pretty good tips to get you on the right track. Check it out:

 

 

 

 

 

[click to continue…]

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Want to learn more about Health Savings Accounts? Read on below: [click to continue…]

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This Day in History

 

1893 – National Cordage Company declares bankruptcy after a failed attempt to corner the hemp market.  At the time, National Cordage was the most traded stock and the selloff of shares quickly spread across the market. National Cordage was assumed to be a healthy, prosperous company, so it’s failure was a surprise to Wall Street. The stock opened at 39 but fell to 20 and the general market dropped in panic as well. General Electric fell from 88.5 to 79.5 (a decline of about 10%), Union Pacific railway fell equally, from 34 3/8 to 31 7/8. The fear would spread into the next day, May 5th 1893 which would become the worst day in stock market history, and remain so until 1929. Sources:  New York Tribune May 5, 1893 page 1, The Evening Star May 5 1893 page 1 and Panic, Prosperity and Progress

The Panic of 1893 would turn into one of the worst economic depressions in the nations history. 14,000 business would close and unemployment would rise to 20%. The depression would last 4 years before the country began to recover.

Best May 4th in Dow Jones Industrial Average History

1906 – Up 3.04% or 1.93 points.

Worst May 4th in Dow Jones Industrial Average History

1970 – Down 2.60%, or 19.07 points.

 

Image of the Day

Hard-Times-1893

The panic of 1893 would lead to massive strikes, marches on the capital, mass unemployment and stock market declines. The panic would produce what would become the worst economic depression in history, and remain so until 1929.

 

 

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Quote of the Day

 

“I can calculate the motions of the heavenly bodies, but not the madness of people.” – Iasac Newton

 

This Day in History

 

1720 – Iasac Newton sells his shares in South Sea Company for a profit of 100%, or about 7,000 pounds. However he couldn’t resist the urge to make more when soon after he would buy back into the South Sea Company Stock and eventually lose 20,000 pounds, leading Newton to state: “I can calculate the motions of the heavenly bodies, but not the madness of people.” – Source: Manias, Panics and Crashes

1933 –  U.S. stocks continue their rally after the U.S. officially abandons the gold standard the day before. After a rise of 9% on the 19th, April 20th the Dow rises another 5.8% – Source: It Was A Very Good Year

Best April 20th in Dow Jones Industrial Average History

1933 – Up 5.80%, or 5.66 points

 

Worst April 20th in Dow Jones Industrial Average History

2009 – Down 3.56% or 289.6 points

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Ben Graham Value Screens Image

 

Looking for potential investments? With thousands of stocks to research, getting started can seem a bit overwhelming. Here are a couple screens (and the companies that made it through) using sets of criteria utilized by the “Dean of Wall Street” and “Godfather of Value Investing”, Ben Graham.

 

The significance of Ben Graham’s Wall Street career cannot be overstated. His investment partnership averaged 17% annual returns over its existence. He created and mentored some of the most successful investors ever to live and has been responsible for the education of more investors than almost anyone with his 2 best-selling investment books, The Intelligent Investor and Security Analysis. He had a very disciplined, rule-based approach to investing that focused on only one thing: A company’s intrinsic value.

 

The following comes from the book, “Einstein of Money”, a great biography of Ben Graham that is also focused on his investment work. Every other chapter breaks from the life story of Graham to detail a main concept in his investment philosophy. Whether it is his concept of Margin of Safety, Fundamental Analysis or advice on dealing with “Mr. Market”, the author does a great job mixing in the life of Benjamin Graham and the ideas behind his work. [click to continue…]

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This Day in History

1915 – Bethlehem Steel vaults from $88 to $117 per share, part of a 10 day rise that would see its share price rise 70 points. The World War 1 boom is underway. (Source: It Was A Very Good Year)

 

Best April 9th in Dow Jones Industrial Average History

1938 – Up 5.25%, +5.75 points

 

Worst April 9th in Dow Jones Industrial Average History

1943 – Down 3.17%, -4.30 points

 

Best April 9th in S&P 500 History

2009 – Up 3.81%

 

Worst April 9th in S&P 500 History

1987 – Down 1.48%

 

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This Day in History

 

April 8th, 1940 – The Dow Jones Industrial Average closes at 151.29, which would come to represent the market’s peak prior to World War 2. The Dow Jones Industiral Average would hit a WW2 low of 92.92 on April 28th 1942. The Dow would not close above 151.29 until December 29th 1944. (Source: The Market’s Measure)

 

Best April 8th in Dow Jones Industrial Average History

1938 – Up 3.93%, +4.14 points

 

Worst April 8th in Dow Jones Industrial Average History

1932 – Down 4.98%, -3.30 points

 

Best April 8th in S&P 500 History

1986 – Up 2.14%

 

Worst April 8th in S&P 500 History

1996 – Down 1.77%

 

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Quote of the Day

“I went down to the street and found the financial district so quiet it seemed like a ghost town. Many brokerage firms had closed down; the rest functioned with skeleton staffs. Just before the opening bell at 10am I entered the board room of one of the leading firms founded by members of one of America’s ‘Sixty Families’. A younger scion of that family, whom I had known for some years, was now managing partner of the firm. He greeted me good-humoredly as an ‘early bird’. In a spacious room that could have held a hundred or more persons, I saw only two or three gloomy customers, who watched the opening in silence. I had brought with me some government bonds…and asked the broker to sell…The broker looked at me as if I were quite a brave fellow.”

-Matthew Josephson on the re-opening of the New York Stock Exchange on March 15, 1933. (Source: Eyewitness to Wall Street)

 

This Day in History

 

1933 – The New York Stock Exchange reopens after being closed since March 3rd. The reopening of trading releases pent up demand after the country has been comforted by FDR in his first ‘fireside chat’ and new banking legislation (The Emergency Banking Act). The Dow Jones Industrial Average rockets up 15.34%, still standing as the largest 1-day percentage gain in stock market history. This rally would continue and produce the best year in stock market history. (Sources: Eyewitness to Wall Street, It Was a Very Good Year)

 

1915 – The World War 1 bull market starts a major leg up. Over the course of the next 30 days, stocks rise 19% (Source: Manias, Panics, Crashes) [click to continue…]

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Quote of the Day

“Believe me, there are eternal investment principles, and technology doesn’t alter them: Time is your friend. Impulse is your enemy. Buy right and hold tight. Cost matters. If you aren’t sure, diversify. Invest for the long-term. Stay the course.”

John C. Bogle , “Reinventing Mutual Funds,” speech, June 11, 2001, http://www.vanguard.com/bogle_site/june112001.html

Also be sure to look in our links at the bottom of this post for an interview with Mr. Bogle and Barry Ritholtz published this weekend.

 

This Day in History

 

1907 – For the second day in a row, stocks fall sharply as stock market fundamentals degrade, eventually leading to the panic of 1907 in October. The decline is lead by railroads, the Dow Jones Railroad index falls from 107.52 to 99.71 (and was at 112.53 just 2 days prior). Dow Jones Industiral Average has also fallen sharply over the same period, down 12% over the last 2 days. (source: It was a very good year)

 

Best March 14th in Dow Jones Industrial Average History

1898 – Up 3.33% or 1.05 points

 

Worst March 14th in Dow Jones Industrial Average History

1907 – Down 8.29% or 5.04 points

 

Best March 14th in S&P 500 History

1986 – Up 1.44%

 

Worst March 14th in S&P 500 History

2001 – Down 2.58%

 

Chart of the Day

Dow Jones Industrial Average around the Panic of 1907: [click to continue…]

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Quote of the Day

“By the end of the first day of trading, some 2.5 million shares had changed hands, and the price of Microsoft’s stock stood at $27.75. The opportunity to take a quick profit was too great for many institutional investors to resist. Over the next few weeks they sold off roughly half their shares.” – Fortune on the Microsoft IPO

After making a quick 40%, almost half of the original shares purchased at the IPO were sold. Over the next 30 years Microsoft stock would rise another 75,000%!

 

This Day in History

 

1907 – The Panic of 1907 is still a few months away, but cracks are appearing in the confidence investors have in American companies. Stocks break lower, led by the once coveted railroads. The Dow Railroad index falls from 112.53 to 107.52. (Source: It was a very good year)

1986 – Microsoft Corp (Ticker: MSFT) goes public with an initial offering price of $21 per share ($0.07 today adjusted for splits and dividends). Every $100 invested at its IPO is worth a little more than $75,000.

 

Best March 13th in Dow Jones Industrial Average History

2003 – Up 3.57% or 269.68 points

 

Worst March 13th in Dow Jones Industrial Average History

1907 – Down 3.94% or 2.48 points

 

Best March 13th in S&P 500 History

2003 – Up 3.45%, 27.71 points

 

Worst March 13th in S&P 500 History

2007 – Down 2.04%

 

Picture of the Day

 

1986_microsoft_ipo_cover2

 

Bill Gates was on the cover of Fortune Magazine after the successful IPO of Microsoft. The original article published July 21st 1986 can be found here.

[click to continue…]

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This Day in History

March 6th, 1933 – The banking crisis that has plagued various states now effects the whole nation. At 1am, Monday March 6th, Franklin Denanor Roosevelt closes every bank in the nation in a shutdown that was planned to last 4 days, along with banning the export of gold and all foreign exchange transactions.  The next couple weeks would become many of FDR’s defining moments preventing the nation’s banking system collapse in the great depression. Banks nationwide would remain closed until at least March 13th. (Source: It was a Very Good Year)

 

Best March 6th in S&P 500 History:

 1998 – Up 1.99%

 

Worst March 6th in S&P 500 History:

1980 – Down 2.23%

 

Best March 6th in Dow Jones Industrials History:

 1902 – Up 1.83% or 0.87 points.

 

Worst March 6th in Dow Jones Industrials History:

1931 – Down 2.69% or 4.96 points.

 

fdr-NYT

 

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This Day in History – March 4th

 

March 4th, 1957 – The S&P 500 index is introduced. Although Standard and Poors introduced its first stock index in 1923, today marks the anniversary of the S&P 500 index as we know it today. It closed the day at 44.06.

 

Best March 4th in S&P 500 History:

 2009 – Up 2.38%

 

Worst March 4th in S&P 500 History:

 2003 – Down 1.54%

 

Best March 4th in Dow Jones Industrials History:


1926 – Up 4.38 %, or 6.32 points

 

Worst March 4th in Dow Jones Industrials History:

 1897 – Down 1.88% or .57 points

 

 

 

Chart of the Day

The S&P 500 since its creation in 1957:

SP500_chart

 

Since March 4th 1957 the S&P 500 has returned 4424%, not counting dividends.

Or,  a compounded annual growth rate of 6.67%, not counting dividends. [click to continue…]

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