Tuesday, March 21, 2017

Advisor Alpha

by Steve Haberstroh, Partner

In our industry, “alpha” is generally defined as an investment fund’s excess return relative to the return of a specific benchmark or index. If an investment fund has a positive alpha, it performed better than a particular benchmark for a specific period of time. For the baseball buff out there, if the average Center Fielder bashed 20 home runs last year but I notched 25, then I generated a home run “alpha” of 5 last year. For the foodies out there, if the average person eats 2 slices of pizza per sitting and I normally eat 6, then ... well, you get the idea.

As you might imagine, it is very difficult to generate alpha consistently over a long period of time (my pizza intake notwithstanding). But alas, alpha exists!

Read on: Advisor Alpha

Topic: Standards


Tuesday, March 07, 2017

Mom’s Million Dollar Gift

by Steve Haberstroh, Partner

I recently had lunch with a good friend of mine who is an Estate Planner at a top law firm in Fairfield County. Let’s call her Leah. Her practice deals with ultra-wealthy families so she is well-versed on sophisticated planning strategies when dealing with dynastic wealth.

After ordering food and making our usual pleasantries, we updated each other on the goings-on within our respective professions. I very much look forward to these lunches as she is full of clever ways to think about estate planning. When she said, “a gift during life is cheaper than the same gift at death,” I leaned in, asked for more details and then knew I had to share.

Read on: Mom’s Million Dollar Gift

Topic: Estate Resources


Tuesday, February 28, 2017

My Wager with Warren: A Reaction to Berkshire Hathaway’s 2016 Annual Letter to Shareholders

by Steve Haberstroh, Partner

It was another classic. Warren Buffett covered everything from colonoscopy prep to the limitations of GAAP accounting. He took me through a range of emotions. For the hour or so I spent with Buffett (figuratively of course), I experienced curiosity, surprise, frustration, reverence, bewilderment, laughter, and respect. The one thing I did not do was cry although it would not have been the first-time Buffett has made me cry. I challenge you to watch the newly released HBO documentary, Becoming Warren Buffett, and not shed a tear.  ...

Read on: My Wager with Warren: A Reaction to Berkshire Hathaway’s 2016 Annual Letter to Shareholders

Topic: Strategies


Has Your Wirehouse Broker Moved Recently?

by Steve Haberstroh, Partner

If so, ask her why?

A February 27, 2017 Bloomberg article entitled, Shrinking Bonuses Slow the Revolving Door of Wall Street Brokers, tells you what is behind many of these moves.

Read on: Has Your Wirehouse Broker Moved Recently?

Topic: Standards


Friday, January 27, 2017

2016 Market Review

by Charlie Haberstroh, CEO & CIO

2016 was the year of surprises. 

January 2016 started with concerns of de-escalating economic growth in China which triggered an historic sell-off in the first five weeks of the year. Extreme pessimism reigned as global growth worries were paramount. Petroleum prices were weak and bonds rallied. Investors grew more and more concerned. Headlines extrapolated short-term weakness into a prolonged correction which amplified investor anxiety. On February 11th, the S&P 500 Index was down 10.27%. But by mid-March, the S&P 500 Index was trading in positive territory. Surprise! The pundits were wrong.

Read on: 2016 Market Review

Topic: The Market


Wednesday, November 09, 2016

Trump Victory and the Markets

by Charlie Haberstroh, CEO & CIO

As the pundits say, elections have consequences. But then again, they’ve said many things that didn’t come true during this election cycle. Like Brexit, almost everyone’s prediction on the results of the US election were wrong on all fronts; most notably, very few predicted the Trump victory and the Republican control of both houses of the US Congress. It is hard to read the tea leaves when there have been few policy pronouncements by Trump or his campaign. As in the US election eight years ago, the American voters wanted change and have spoken loudly.

Read on: Trump Victory and the Markets

Topic: The Market


Friday, June 24, 2016

BREXIT:  What Now?

by Charlie Haberstroh, CEO & CIO

That’s the pertinent question.

Folks in the Western Hemisphere are now waking up to the news that the UK has narrowly voted to leave the European Union. Global markets are showing their displeasure as most equity indexes are facing steep losses. As I write this (6:45 am EST), the UK’s FTSE is off by 5%, the German DAX is off by 7%, Spain’s IBEX is off by 10%, and the S&P 500 Index futures are signaling a 3% loss at the open (2.5 hours from now). If each of the markets closed at these levels, they’d erase the last week of gains. So that is where we are now. What happens next?

Read on: BREXIT:  What Now?

Topic: The Market


Friday, February 19, 2016

My Painter Arrived Today with His Investment Account Statement

by Steve Haberstroh, Managing Director

If your portfolio is keeping you up a night, spend some time to review your holdings and rationalize why you own them. If you are having trouble doing this, please give us a call.

Read on: My Painter Arrived Today with His Investment Account Statement

Topic: Standards


Tuesday, January 26, 2016

MLP Analysis

by Steve Haberstroh, Managing Director

It was a rough year for Master Limited Partnership securities, commonly known as “MLPs”.

The largest MLP Index Fund, the JP Morgan Alerian MLP Index Fund, (which we have written/spoken about in the past) was down 32.96% including dividends in 2015. The price of WTI Crude was down 37.41% in 2015. Based on published research, less than 15% of the pipelines contained in this ETF have direct oil or natural gas price risk. 85% of the companies within the fund make revenues much the same way that toll roads do. The more volume that passes through their pipes, the more revenue they collect. We have found no credible evidence that the demand for oil or natural gas in this country has dropped enough to warrant such a dramatic sell off in the prices of these securities ...

Read on: MLP Analysis

Topic: The Market


2015 Market Review

by Charlie Haberstroh, CEO & CIO

As we entered 2015 we believed that the US equity markets were “fully” valued and that the European markets showed better equity values. We also believed that traditional fixed income would not be a winning investment. In addition, we believed that investors should avoid emerging markets’ debt and equities. We continued to maintain exposure to US equities principally (1) through managers who bought equities which they believed were undervalued compared to their intrinsic value (in some cases by an estimated 30%) and (2) through two proprietary strategies: (a) one of which purchases companies’ equities which are valued 25% lower than the average market price earnings ratio but have above average growth prospects; and (b) the other identifies high quality companies which have increased dividends consistently over the last 10 years. Interestingly enough, 2015 proved to be one of the “worst best” years in terms of the performance of major asset classes ...

Read on: 2015 Market Review

Topic: The Market


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