Lessons for Building a Winning Portfolio 7 potx

... the case of companies that are buying back their shares. A company that has grown its earnings by 5% per year and annually buys back 5% of its outstanding shares will appreciate by 10% per year, ... observers, and unfortu- nately, this is eventually what happened. Third, and most important, the real beauty of the above formulas is that they can be rearranged to calculate the market’s expect...

Ngày tải lên: 20/06/2014, 20:20

... (Smith), 65 Company characteristics cyclical companies and risk, 64, 277 - 278 default and bankruptcy, 69 70 great company/great stock fallacy, 173 – 175 quality and returns, 34–38 size and returns, ... 293–294 performance of, 77 78 Akamai Technologies, 152 Allen, Frederick, 189 Allocation (See Asset allocation) Amazon, 56 Ambrose, Stephen, 131 American Century mutual funds, 205 Americ...

Ngày tải lên: 20/06/2014, 20:20

... should have a firm asset allocation pol- icy in place. What separates the professional from the amateur are two things: First, the knowledge that brutal bear markets are a fact of life and that there ... list of maladaptive behaviors will corrode your wealth as surely as a torrential rain strips an unplanted hillside. Misbehavior 179 all searching for the financial Fountain of Youth....

Ngày tải lên: 21/06/2014, 02:20

... companies arecalled “growth stocks,” and those ofbad companies arecalled“value stocks.” Let’s considerfor a moment, Wal-Martand Kmart. The formeris finan- cially healthyand universallyadmired, ... withlegendary management, a steadily growing stream of earnings, and a hugepileof cash on hand for emergencies. The latterisasick puppy, having recently declaredbankruptcy due to marginal fi...

Ngày tải lên: 20/06/2014, 20:20

... high-octane Manhattan Fund. Unfortunately for Tsai, just at that point, he was struck with a fatal case of chimpanzee syndrome. The years 1966–19 67 were mediocre for Manhattan and in 1968, the patient ... “best” managers produce returns that are easily explained by the laws of chance. Are we in Randomovia yet? Almost. If we actually were in Randomovia, we would find that above-average...

Ngày tải lên: 20/06/2014, 20:20

... value each year as capital gains. Fortunately, there are now “tax-efficient” index funds designed for taxable accounts, which are generally able to avoid capital gains. In 1999, Vanguard created ... unnecessary capital gains and resultant taxes. For the taxable investor, indexing means never having to pay the tax and investment consequences of a bad manager. Why Can’t I Just Buy and Hol...

Ngày tải lên: 20/06/2014, 20:20

... the S&P 500 was less than infla- tion—that is, it had a negative real return—whereas the EAFE beat inflation handily. You’ll also see that the EAFE beat the S&P 500 by a similar margin ... rough.That is not to say that yourreturn requirements are immaterial. For example, if you havesaved a largeamount forretirementand do not plan to leavealarge estate for 114 The Four Pillar...

Ngày tải lên: 20/06/2014, 20:20

... the roads and public safety made travel a danger- ous, slow, and extremely uncomfortable endeavor. At a stroke, the railroads made overland travel cheap, safe, rapid, and relatively comfortable. ... financial chaos of Paris arrived a most extraordinary Scotsman: John Law. After escaping the hangman for killing a man in a 1694 duel, he studied the banking system in Amsterdam and ev...

Ngày tải lên: 20/06/2014, 20:20

... gravitational equation from a falling apple and Darwin’s extrapolating the theory of evolution from observ- ing gardeners and farmers select for favorable plant characteristics are two spectacular ... should have a firm asset allocation pol- icy in place. What separates the professional from the amateur are two things: First, the knowledge that brutal bear markets are a fact of life a...

Ngày tải lên: 20/06/2014, 20:20

... financial and economic data to forecast market direction. If we have learned any- thing over the past 70 years from the likes of Cowles, Fama, Graham, and Harvey, it’s that this is a fool’s errand. ... $71 million. At that point, the fund’s performance turned around, and it gradually began to accumulate assets again, finally reaching the $1 billion mark in 1998. In that year, it beat the S...

Ngày tải lên: 20/06/2014, 20:20