The Debt Elephant in the Living Room

Behind closed doors U.S. politicians on both sides of the aisle acknowledge that something needs to be done about the future cost of entitlement programs  and our growing national debt. The secular bear market view holds that the U.S. will not be able to fix these issues politically and the problem will eventually be resolved…

Leaving Style Boxes Behind

Recently I was interviewed by Money Magazine on the topic of Exchange Traded Funds (ETFs). I pointed out that ETFs are an excellent investment tool to implement a sector rotation strategy, and that sector rotation was completely different from the Morningstar Style-Box approach to equity selection. Morningstar is perhaps the best-known research firm specializing in…

The Humility Helmet

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…

Economics and the Problem with Assumptions

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…

A New Way to Describe What We Do

I am often surprised at how the investment industry media finds ‘news’ in investment methods that Pinnacle has been employing for years. This weekend’s Wall Street Journal offered a wonderful example. In a Saturday article entitled, “Same Returns, Less Risk,” Ben Levisohn and Joe Light describe a new investment strategy where portfolio managers handle risk…

‘Chilling’ at Neutral

This weekend I had the opportunity to speak to the Baltimore Chapter of the American Association of Individual Investors (AAII). I was pleased to see so many members interested in learning about investment strategy on a Saturday morning. As I always do when discussing tactical asset allocation, I made it clear to the audience that…