The last index that we will look at in this series is the Russell 2000. The Russell 2000 is an index managed by FTSE Russell, which consists of companies with smaller market capitalization and is thus considered a “small cap” index. The term “small cap” is somewhat of a misnomer. Although there is no official […]
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The third index that we will look at is the NASDAQ Composite Index. Unlike the other indices that we have reviewed (S&P 500 and Dow Jones Industrial Average), the NASDAQ Composite consists only of stocks that trade on the NASDAQ. A brief review of the NASDAQ exchange is thus a good place to start. Brief
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The Dow Jones Industrial Average (DJIA) This post is the second part in a series covering the four major stock indices. What Is the Dow Jones Industrial Average? In the last post, I discussed the most referenced stock index – the Standard and Poor’s (S&P) 500. Another widely reported, and far older, index is the
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This blog post is the first in a four-part series. It explores the four major stock indices, which are the benchmarks that shape how we talk about “the market.” Before diving into the S&P 500 specifically, it’s worth taking a step back to understand what a stock index really is and why it matters. From
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When Momentum Cuts Both Ways Tuesday’s gold selloff highlights a feature of markets that too many people forget: momentum works both ways. Gold has had one of its best years since it was demonetized in 1971. On the spot market—where gold is purchased for immediate delivery—prices have risen from roughly $2,600 at the beginning of
Gold’s Momentum Trade: Why Prices Are Rising — and Falling — Faster Than Ever Read More »
A Timely Book for Investors A few times a year, a book comes out that makes this middle-aged bookworm as excited as a kid on Christmas morning. October 14th, Andrew Ross Sorkin’s new book, 1929: Inside the Greatest Crash in Wall Street History – and How it Shattered a Nation, was released. I practically chased
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“Ignoring the Macro” Can Be Misleading Value investors invest in businesses, not markets. Accordingly, many investors take pride in “ignoring the macro and focusing on the micro.” In my opinion, investors shouldn’t take this adage too literally. I’ve seen too many financial market blowups to think that “ignoring the macro” is a good idea. The
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In a previous blog post, The Risks of Financial Leverage in Small Business Acquisitions, I discussed the increased number of online influencers. They are promoting small business acquisitions as a path to creating wealth. While there are plenty of entrepreneurs who have become very wealthy acquiring small businesses, these deals are not without risk. Influencers
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Why Small Business Acquisitions Look So Attractive Many business influencer’s have been touting the benefits of acquiring a small business and installing an operator. As someone who has invested in a handful of small businesses and has consulted for many more, I thought it would be remiss of me not to highlight some of the
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In honor of Warren Buffett’s 95th birthday, here are five timeless investing lessons I’ve learned from studying his remarkable career. 1. The Importance of Permanent Capital One of the most overlooked aspects of Warren Buffett’s career is the institutional structure of his investment vehicle, Berkshire Hathaway, Inc. By investing through a publicly traded holding company,
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