Mind the Gap: Inequality and Diversification
Understanding the origins of wealth inequality is critical in the debate over what, if anything, to do about it. Are investment fees and taxes really to blame, or is there something else at play?
There’s No Place Like Home: The Case For and Against Extreme Home Bias in Equity Investing
Is Home Bias really worth worrying about? Today, we’ll evaluate 10 of the most common arguments heard in support of home bias.
Do US Industry-Sector Weights Explain the Higher Valuation of US vs non-US Equities?
US equities have consistently outperformed non-US equities over the past decade – so, what exactly does this mean for investors?
A Conversation with NYU Professor Aswath Damodaran
Victor sat down with NYU Professor Aswath Damodaran to discuss some of the biggest topics in finance today: from indexing, to factor investing, to why investors ignore momentum.
When it Pays to Pay Capital Gains
One approach for efficient investing is to defer realization of gains while aggressively realizing losses. For investors with a steady stream of short-term capital gains, this can be improved – and in a seemingly counter-intuitive way.
When They Won’t Accept That You Really Don’t Know, Tell Them About Mo
By Victor Haghani and James White Most of us working in the finance industry are used to being regularly called on to predict where different assets are heading. We figure […]
Reflections on the Mega Millions Lottery: Can a Lottery Ticket with Great Odds Still be a Bad Bet?
By Victor Haghani and James White Last week two of our favorite financial journalists – the WSJ’s Jason Zweig and Bloomberg’s Matt Levine – covered the Mega Millions lottery featuring […]
Measuring the Fabric of Felicity
By Victor Haghani and James White We steer our financial course through life choosing how much to spend and how to invest what’s left, periodically updating our choices as circumstances […]
The Most Important Number Not Printed in the WSJ
By Victor Haghani and James White We are often asked for our estimate of the long-term return of the equity market. Our framework currently indicates 5.3% above inflation for global […]
A Penny Saved is Two Pennies Earned
By Victor Haghani and James White Most of us associate the maxim “A penny saved is a penny earned” with Benjamin Franklin, but what he actually said is far more […]
Sensible Investing in a Nutshell: Robin Powell, The Evidence-Based Investor, interviews Victor
In this five-minute video Robin Powell, aka the Evidence-Based Investor, in his “journey to uncover the truth behind investing” interviews Victor.They discuss the meaning of the Puzzle of the Missing […]
What Gamblers Can Teach the Buy-and-Hold Crowd
By Victor Haghani and James White The ongoing attack on stock-picking waged over the past 65 years now clearly has the upper hand. Early combatants included Markowitz, Samuelson, Sharpe, Fama, […]
New Year, New CEO, New Home James White takes over as CEO
The New Year brings two exciting developments at Elm. The first is that James White, who has been working with Elm for the past year, is taking on the role […]
Discussions on Risk Parity and the Sharpe Ratio
In our ongoing writing on the topic of investment sizing and portfolio choice, we recently published two articles that discuss the use of Sharpe Ratio in building portfolios with the […]
HHHHHHHHHHHH: Is there a message in there? Elm Research in Bloomberg Prophets
By Victor Haghani and James White The 12-month winning streak of the stock market through the end of October reminded me of a Friday afternoon on the Salomon trading floor […]
The Chemistry of 10% More
By Victor Haghani A few nights ago at the dinner table, I was ritually lamenting my unsuccessful efforts to lose a few pounds. My son Mark, now a high school […]
Some Clarity on Risk Parity
By Victor Haghani and James White This post was first published on Bloomberg Prophets. Google “risk parity” and you’ll see a grab bag of conflicting results: articles and posts trying […]
Elm research wins William F. Sharpe Award 2017
The Journal of Portfolio Management recently published Elm’s research paper ‘Do Index Buyers Make Overvalued Stocks More Overvalued?’ We must have said something that sounded insightful, because the note was awarded […]
Elm coin-flipping Research discussed in Economist Buttonwood article What's Past is Not Prologue sheds light on difficulty in choosing active managers
From The Economist: WHO wants mediocrity? That is what a lot of people say when the subject of index-tracking, or passive fund management, comes up. They would rather choose a […]
How Much Should the Tax Tail Wag the Asset Allocation Dog? A Rule-of-Thumb for Weighing Capital Gains Taxes in Portfolio Rebalancing Decisions
By Victor Haghani and James White For investors who feel the expected return of equities isn’t as attractive today as it was 5 to 10 years ago when PEs were […]
Our Coin Flipping Research in the Journal of Portfolio Management
The research we conducted into how people bet on a computer-generated coin-flip they are told has a 60% chance of landing on heads was published in the Spring 2017 edition […]
What’s Past is NOT Prologue
By James White, Jeff Rosenbluth and Victor Haghani Thank you to the 702 people who read and interacted with our note exploring when past returns are indicative of future returns. […]
What Our Market Return Forecasts Really Mean: Equity Convexity and Investment Sizing
By Victor Haghani and James White The key issue in investments is estimating expected return. – Fischer Black Introduction You’re probably familiar, at least in passing, with the ‘convexity’ of […]
A Sharper Lens for Sizing Up Nickels and Steamrollers
By Victor Haghani and James White In a world of low rates and high stock prices, it’s natural that many investors are looking for ways to earn a good return […]
Podcast: Ignore Investing’s Mathematical Underpinnings at Your Peril
I recently had the pleasure of featuring on Bloomberg’s Odd Lots podcast, with Joe Weisenthal and Tracy Alloway. They asked me some great questions about mathematics in investing. You can […]
Do Index Buyers Make Over-Valued Stocks More Over-Valued?
For more than 60 years, the capitalization-weighted market portfolio has been a cornerstone of the modern theory of investing. As it inexorably takes its place as a cornerstone of investment […]
Lessons from Betting on a Biased Coin: Cool heads and cautionary tales
By Victor Haghani and Richard Dewey Introduction You’re invited to a talk by a former hedge fund manager who was a partner at a fund that famously flopped about twenty […]
Active Index Investing: A contradiction in terms? Victor Haghani on Bloomberg TV
Our founder, Victor, recently appeared on Bloomberg to discuss this short research note. You can watch part two of the interview here – Victor answers “What’s the implication of the fact that […]
What I learned from my daughter (about investing)
My daughter Jessica, a cognitive science major at university, caught me with a fun brain-teaser. It came up in a psychology class she was taking with Professor Phil Tetlock, author […]
How to invest with Elm – Fidelity SMAs vs Fund
We offer US taxable investors a choice: a separately managed account at Fidelity, or a Delaware private Fund. (for US IRA investments, we only offer SMAs at Fidelity). The following […]
If You Want to Own Property, REITs Provide a Huge Head Start vs Direct Investment
By Victor Haghani If you’ve decided you want to allocate some of your savings to real estate, you may want to compare the merits of publicly listed REITs, like Vanguard’s […]
The Unexpectedly High Expected Return of Global Equities
It seems just about everyone I talk to these days is underwhelmed by the long-term expected return of the global stock market. I too am more worried than normal about […]
We’re often asked about Elm Partners’ US office in Jackson Hole, Wyoming. Below is a short video shot by my son Josh using his quadcopter a few days ago, all […]
Working Capital Review: A Conversation With Victor Haghani (Audio)
Victor sat down with Chris Riback of Working Capital Review to discuss his career, his thoughts on investing, and how Elm came to be. Read the full article here.
How well do global market-cap weighted indexes represent the true “market portfolio”?
The most common map of the world is called the Mercator projection. It’s a compromise, as there is no perfect way to represent the shape, distance and land mass of […]
Video: The most important number you won’t find in the Wall Street Journal
The Wall Street Journal publishes 10,000 different numbers every day…but you won’t find the one that’ll help you decide how much to save or how to invest your savings. In […]
ETFs: Better Than Mutual Funds for Long Term Investors too?
Assets invested in Exchange Traded Funds (ETFs) just broke through the $3 trillion milestone, 25 years since their birth. At Elm Partners we use ETFs extensively, making up about 40% […]
Vanguard’s sweeping index changes (adding China A-shares & small caps)
Many of Elm’s investors have asked what we thought of the changes announced by Vanguard last week. I thought I would share a few of my thoughts on the subject. […]