“Whatever It Takes”
Rick Vollaro+ | July 27, 2012
As recently as this week Spanish bond yields had been roiling the markets as they crossed the 7% threshold that is considered the point of no return. With system risk rising anew, the onus was on policy makers to get moving in another attempt to bring down spreads and calm global markets. In the last few days, policy makers have [...]
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The Humility Helmet
Ken Solow+ | July 24, 2012
I just returned from a trip to Canada that took me from Niagara Falls to Toronto to Montreal to Old Quebec, and then back to the U.S. Our final stop before getting on the plane home was the Norman Rockwell museum in Brockton, Massachusetts. The museum owns hundreds of Rockwell’s original paintings, many of which are iconic images that once [...]
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Neutral is STILL a Moving Target
Sauro Locatelli+ | July 22, 2012
A few weeks ago, I introduced you to the concept of pro-forma portfolios, and explained how we use them to estimate our current portfolios’ position in terms of volatility and beta. There is an Italian saying that could be translated as “to trust is good, not to trust is better.” While the pro-forma portfolios give us the best possible ex-ante [...]
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Advice for a 60-Year Old, About to Retire
Ken Solow+ | July 17, 2012
A journalist once asked me what advice I’d give a 60-year old, about to retire. To be honest, I might as well have been asked to list the causes of the Civil War. From the perspective of a trained financial planner and the Chief Investment Officer of a private wealth management firm, the question is, well… difficult. The journalist was [...]
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Economics and the Problem with Assumptions
Ken Solow+ | July 11, 2012
Two of the most destructive forces for the economy are the words “let’s suppose” and the use of the = sign. When we put the two together, they form a combustible combination that gives seemingly well-intentioned and rational investors the power to disintegrate assets at will. This is because investors have a desperate need for quantitative models that will justify [...]
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One Step Forward, Two Steps Back
Rick Vollaro+ | July 6, 2012
Last Friday, after the 19th European emergency summit, markets rallied on the idea that the 19th time might be the charm, and Europe might finally be awakening to the gravity of the current situation. Spreads on Spanish and Italian bonds came in handily, and equity markets around the globe rallied furiously after European leaders pulled an all-nighter on Thursday to [...]
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