I bought this to commemorate this moment in markets—when all our worst behavioral biases were on full display.
Now that I own it, I assign it a greater value than I did before.
It’s gotta be worth at least $483.
If you must trade:
USE LIMIT ORDERS
USE LIMIT ORDERS
USE LIMIT ORDERS
USE LIMIT ORDERS
USE LIMIT ORDERS
USE LIMIT ORDERS
USE LIMIT ORDERS
USE LIMIT ORDERS
USE LIMIT ORDERS
USE LIMIT ORDERS
USE LIMIT ORDERS
USE LIMIT ORDERS
USE LIMIT ORDERS
USE LIMIT ORDERS
AND WASH YOUR HANDS!
There is an investment strategy that is:
1.) Diversified
2.) Inexpensive
3.) Tax efficient
4.) Has tons of capacity
5.) Has performed well over a long period
6.) Has been used well by investors
That strategy is market-capitalization weighted indexing.
I'm still trying to wrap my mind around the fact that $ARKK is down ~50% YTD but has pulled in $908 million in net new money.
Theories:
1.) Investors are doubling down
2.) Shares are being created to short
3.) Super-volatile ETFs will find a market
What am I missing?
Burry: “Small caps are overlooked by many large institutional investors.”
Voice of Reason: “Hasn’t that always been the case?”
Burry: “Did I forget to say ‘Passive Bubble’?”
Voice of Reason: “How is that relevant?”
Financial Media: “CHRISTIAN BALE JUST SAID PASSIVE BUBBLE!”
After this most recent round of fee cuts, investors can build a 50/50 stock/bond $VT/$BNDW portfolio which owns virtually every stock and bond on the planet with a minimum investment of ~$150 and a blended fee of 0.09% (~$0.14/year).
We're at a point in the cycle where I'm beginning to think that the only way for small value stocks to make a sustained comeback is for Ark to launch a small value fund.
Hold in May
and June
and July
and August
and September
and October
and November
and December
and January
and February
and March
and April
and so on, until you need to sell for a good reason.
Vanguard has announced another round of fee cuts just in time for last-minute Christmas shoppers looking for a deal.
Shaving a bp off $VT’s fee means investors can now own a near-complete global portfolio ($VT + $BNDW) with a blended fee of ~0.07%.
Vanguard readying a true "robo" service, Vanguard Digital Advisor, to brokerage clients and retirement plans. Brokerage minimum will be $3,000 and all-in fee 0.20%.
$ARKK pulled in nearly $400 million in flows Mon.-Thurs. this week.
Thursday's haul was $334 million.
The fund's YTD flows total now stands at $1.3 Bil.
The fund's YTD return is -52%.
In 2010,
@MorningstarInc
gave me the opportunity to build a world-class research team.
Next week, I'll take on a new one, continuing to advance our mission of empowering investor success.
I'm proud of what we've done and excited for what's ahead.
In the three months since we announced we are going on our first family trip to Disney World we have received ~100X the amount of unsolicited advice that we got in the nine months before we had our first child.
A Neuberger Berman study shows that once you ignore dead and merged funds and look only at the top three quartiles of surviving ones, the majority of actively-managed stock funds beat their index over the 20 years through Dec. 2018. 🧐
Somewhere among the mountains of data in Amazon's possession lies a precious gem: the identities of customers who have purchased a Protection Plan for a kettle bell.
Who are you? Why have you done this? Why is the 3-year plan nearly 3x the cost of the 2-year plan?
Of the 493 ETFs launched in 2021:
- 60% are actively managed
- 14% track ESG indexes
- 9% track thematic indexes
- 4% track factor indexes
So really, at least 87% of new ETF launches this year were, for all intents and purposes, active ETFs.
Today in "Life After Mutual Funds"...
Year-end '22 numbers are in:
- Mutual Funds - $958 Bil outflows
- ETFs - $589 Bil inflows
A $1.55 Trillion swing in favor of ETFs--the largest ever.
The
@MorningstarInc
database has monthly return #'s for 691 active U.S. large cap funds that were launched and closed between 1/1/2000 and 12/31/2019.
- 83% underperformed $VTSAX during their lifespan
- That group lagged by an average of ~5% annually
Dead funds tell no tales
As of the close of trading on Oct. 10, $VTI overtook $ARKK.
As of the close on Oct. 13, $VTI outperformed $ARKK by 50 bps annualized since $ARKK's inception in October 2014.
Repeat after me: "Smart beta" is active management.
You should expect this sort of return spread and do every bit as much due diligence on these "index" funds as you would in vetting active managers.
Step 1: Turn off your TV
Step 2: Put down your phone
Step 3: Spend time with the people who matter most to you
Step 4: Consider your portfolio protected from impeachment volatility
My own investing do's and don'ts.
Do:
- Save
- Keep it simple
- Keep it cheap
- Be tax-aware
- Keep a decision journal
- Set aside some "funny money"
Don't:
- Overpay
- Look
No Room on the ARK?
My colleague Bobby Blue and I examined ARK's mounting capacity concerns and the drawbacks of running capacity-constrained strategies in fully-transparent active ETFs.
As I see it, ESG is:
1.) A framework for evaluating risk
2.) A way to express preferences
3.) A marketing varnish for asset managers
This presents investors with new opportunities and challenges.
I'm proud to be part of the
@MorningstarInc
team that's helping to navigate them.
There are 56 strategic-beta ETFs that had median annual turnover >= 100% over the past 5 years.
Over that span, there were just 6 cap gains distributions made by 3 funds in this group.
All 3 invest in EM stocks. Some EM stocks cannot be transferred in-kind.
#TaxEfficiency
People spend $5,000 on a 5 day vacation.
But then they forget to bring home the hotel soap that would save them $ that they could invest in the S&P 500 that could give them a lifetime of vacation.
Here's what the top of the ETF league table will look like once fee wars and cost cutting measures force sponsors to drop the vowels from their names:
1.) Blckrck/Shrs
2.) Vngrd
3.) SttStrt
4.) Invsc
5.) Chrls Schwb
Me: Price weighting and adding/removing stocks at the discretion of a committee are a silly way to index, a relic of a bygone era.
Also me: Just 8.6% of the 1,474 actively managed large cap mutual funds that were around twenty years ago both survived and beat this silly index.
Happy Birthday to the S&P 500, which turns 62 today!
- The bogy was 19 when it found its first index fund
- 25 when futures came into its life
- At 26 it found options
- When it was 36 $SPY happened and life will never be the same
Absolutely epic must-read piece on how ETFs have transformed bond markets by
@RobinWigg
and
@double_you_ess
.
I've long thought that this has been the most under-appreciated chapter of the ETF story.
Hold in May
and June
and July
and August
and September
and October
and November
and December
and January
and February
and March
and April
and so on, until you need to sell for a good reason.