Ritholtz Warns Against Buying Based on Media “Nice Lists”

Be wary of the media-hype around the “best stocks to own in 2017” says columnist Barry Ritholz, CIO of Ritholz Wealth Management, in a recent Washington Post article. The lists, Ritholz argues, “look slick and professional; they seem to be expertly assembled” with both high-profile and more obscure names. He explains, however, that after taking three of the “top ten” lists gathered from a simple Google search and checking on their performance over the past year, he found their performance to be “for the most part, pretty mediocre.” Most lists, in fact, tend to underperform the benchmark, he says, offering […]

Ritholtz on Hindsight Bias

“Everyone knew Trump would win all along,” writes Barry Ritholtz in last week’s BloombergView, arguing that such hindsight bias “haunts investors constantly.” Specifically, he explains, the human brain creates “stories after the fact to conform with what we now know.” Ritholtz uses the examples of; (1) the financial crisis, and how many people claimed (after the fact) to have seen it coming, and (2) the throngs of folks who say they predicted the success of Amazon, Google, Facebook and Apple. “These folks are fooling themselves,” says Ritholtz. Why? He explains that the brain is wired to “make sense of a […]

Billionaire Advice Might Not Fit the Bill for All

Another round of advice on sticking to an investment plan might sound like our needle is stuck, but this time we’re coming at it from a slightly different angle. Bloomberg View columnist Barry Ritholtz shares perspective on comments made earlier this month by Convergex chief strategist Nick Colas. The gist of Colas’ view was that investors should heed the advice of billionaire investors such as George Soros, Jeff Gundlach and Bill Gross, all of whom seem to agree that that stock market isn’t the place to be right now. But according to Ritholtz, the problem with following the lead of […]

Remember Ritholtz’s Advice During Next Market Sell-Off

“Something bad happens somewhere, and markets are unhinged. Once the noise subsides and the markets settles down, everyone wonders what the heck just happened,” writes Barry Ritholtz, chief investment officer of Ritholtz Wealth Management and columnist for The Washington Post. He references the Brexit vote and why it, or other macro events, shouldn’t affect your investment plan. Ritholtz points out that “markets have on average swung 2 percent up or down once every 11 days since the year 2000”. Therefore, he asserts, the volatility in the wake of the Brexit vote should have come as no surprise. The columnist outlines […]

What Investors Can Learn From Baseball Great Ted Williams

“Hall of Famer Ted Williams approached batting not as something done on instinct, but rather as a methodical, evidence-based process,” says BloombergView columnist and founder of Ritholtz Wealth Management, Barry Ritholtz. Ritholtz recalled that Warren Buffett had recommended Williams’ book, “The Science of Hitting,” in the context of making better decisions. He writes that “Williams emphasized research, evaluated data and created specific rules for batting,” and that he “thought deeply about probability, made discipline a key part of the process and analyzed the strike zone mathematically.” Ritholtz then compares Williams’ quant-like approach with “the way in which many investors think […]