Has the Stock Market Ever NOT Been Rigged?

Is the stock market rigged? This could have been the headline for the last 400 years – possibly longer – depending on when you claim the stock market “started.”

It seems like every week the media “uncovers” that the market is rigged. Some of the coverage is thoughtful, and some is not.

Today the focus is on high frequency trading. ...

More →
0

Are Bad Stocks Easier to Identify?

No.

Although for someone new to investing it can be tempting to think this way.

I remember back when I was studying for the series 7 exam and first learned about shorting stocks. I was intrigued by the idea you can make just as much money betting a stock will go down as you can that a stock will go up.

It all ties back into the unpredictability of stock prices. When I say you can’t predict the market or ...

More →
0

Why Margin Isn’t Even Marginal, at Best (Part 2)

Most people simply think of investing on margin as increased risk for the potential of increased return.  But under the surface it is a lot more illogical than a shift in the trade-off between risk and return.

When you buy stocks on margin you are taking over the role of corporate CFO.  Most people don’t think about it this way, but it is true. With a margin purchase, an investor is effectively ...

More →
0

Why Margin Isn’t Even Marginal, at Best (Part I)

I generally advise families to avoid using margin for investment purposes. This applies to the accounts I manage and to the investment vehicles I recommend in those accounts (mutual funds, ETFs, etc). There are several reasons why.

 The “L” word

First and most obvious, with the leverage that margin enables, there is a greatly increased chance that an investor will be totally wiped out by a market downturn. When a family is investing for generations, there will be many ...

More →
0