The Big Picture

That French Vine Guy
Succinct Summations of Week’s Events 1/30/15
John Bogle’s Investing Genius Needs An Update
10 Friday AM Reads
Aston Martin DB4, DB5 and DB6

That French Vine Guy

Posted: 30 Jan 2015 05:30 PM PST

Great story

Source: NYT

Succinct Summations of Week’s Events 1/30/15

Posted: 30 Jan 2015 12:45 PM PST

Succinct Summations week ending January 30^rd

Positives:

1. Weekly jobless claims fell 43,000 to 265,000, the lowest since 2000!
2. Apple reported a record breaking quarter as it sold 74.5 million iPhones
3. Personal consumption came in at 4.3% vs 4% expected.
4. Chicago PMI came in at 59.4 vs the 57.5 expected.
5. U of Mich consumer confidence came in at 98.1, a hair below expectations but still strong and up from 93.6 in December.

Negatives:

1. US Q4 real GDP came in at 2.6% annualized vs 3% expected.
2. Durable goods fell 3.4% m/o/m, below expectations and down from the 2.1% decline in November.
3. The S&P 500 had back-to-back down months for the first time since 2012
4. Yields keep falling around here and around the globe; 30 year hits lowest yields ever.
5. Earnings season has not been kind to some of the biggest companies, including Caterpillar, Microsoft and Qualcomm.
6. Dallas fed manufacturing index came in at -4.4 vs 3 expected.
7. Germany, Europe's largest economy fell 0.3% m/o/m, the first negative print since 2009.
8. The S&P 500 has moved in a range greater than 1% in all but two trading days in January, volatility is back.
9. Pending home sales fell 3.7% m/o/m

John Bogle’s Investing Genius Needs An Update

Posted: 30 Jan 2015 07:45 AM PST

Now before I commit blasphemy, a few words: I am as close to being a Boglehead as you will find, without actually being one. The bulk of my portfolio is in passive indexes. Most of the assets I manage are in a broad allocation model.

This is a tribute to the wisdom and teachings of investing legend John Bogle, who founded Vanguard Group 40 years ago on the premise that matching market-based returns yielded better results for most investors than picking individual stocks, market-timing or any other investment strategy. During the past four decades, the sleepy firm Bogle started has turned into an investment giant, now managing about $3 trillion.

But we have learned many things during the intervening years. I don’t want to commit the sin of ignoring the accumulated quantitative evidence. There are certain mathematical truths in investing, and to pretend they don’t exist would harm my portfolio (and my clients).

Please understand that my deviation from Bogle’s philosophy isn’t due to hubris, but rather, mathematics. Certain facts of long-term investing have such strong evidence behind them that they are almost incontrovertible. It would be irresponsible for any investor, or their fiduciary, to ignore this evidence. Hence, I find myself at odds with someone I respect in four areas of portfolio management:

Continues here

10 Friday AM Reads

Posted: 30 Jan 2015 04:30 AM PST

The work week is ending, the Superbowl is almost here, and we have our guaranteed 13.5 PSI morning train reads:

• How, and Why, Apple Overtook Microsoft (NYT)
• Legends of Indexing: Rob Arnott (ETF.com)
• Gold Tarnishes as U.S. Economy Strengthens (WSJ) but see Foreigners Are Failing to Buy Enough Stuff (Bloomberg View)
• Thanks a lot, austerity! We could have had 2014′s economic recovery in 2011. (The Week)
• Building The Perfect Investor (Millennial Invest) see also An Investing Frankenstein (Reformed Broker)