The Transparent Advisor

by Danno GameStop is all over the mainstream news this week because some traders have pumped up the stock price via social media platform Reddit.  It's now gone viral, and morphed into a "stick it to the man" (the hedge fund short-sellers) trade. They're calling it the Reddit Rebellion. Subreddit r/WallStreetBets is an online forum where members aren't looking to establish long-term investing careers.  Rather, they're effectively buying lotto tickets on commission-free trading apps.  While some of them are certainly skilled, it's mainly unsophisticated "investors", where losses of 10's and 100's of thousands of dollars are so common it's considered the norm .  It's a fascinating, self destructive, nearly intentional transfer of dollars from traders to investors, on the off chance that there will be the occasional winner sprinkled in.... and that's what keeps them coming back for more!   As nuts as that might sound, it's ac

It's been a tumultuous couple weeks and months on cable news (aka reality TV).   Disappointing...  Embarrassing. Stocks be like: Since the election the S&P 500 is up almost 14%, Nasdaq 100 is up 16%, MidCaps and SmallCaps are up 25% and 24%, International Developed and Emerging are up 22% and 19%.  Go figure.   So much for the stock market crash if Biden wins.   Remember this 4 years from now.  The market doesn't care, it just wants clarity. For quite some time now you've been able to choose your own adventure by staying locked on your chosen channel.  It's no different than if you live in Wisconsin you like the Packers, if you were born 1 toll booth away you hate the Packers.  Right?   We get brainwashed by whatever we choose to consume and surround ourselves with. We just don't know we're doing it, it's how the brain works.  Before long, there is a strong emotional connection, and then we try to form seemingly rational arguments why our side is right a

by Danno End of Q4 means another quick look under the hood for the full year. Again, I like to zoom out and look at it by Style, by Asset Class, and by Sector so I can try to look past the news (i.e. noise) of the day and understand the larger themes that are going on. The US 2020 full-year style box including dividends looks like this... Growth just destroyed Value again this year across all company sizes and geographies. That's been a recurring theme for almost half a decade now.  That pendulum will swing too far at some point, but for whatever reason the trend remains intact for now. Q4 included more than +30% for Small Growth and Mid Growth, catching up to and blowing past Large Growth for the year.  Small Value and Mid Value did some catching up to Large Value in Q4 as well, but not to the same extent as in Growth.   You might call that a reopening trade, but there are always underlying rotations going on inside the market from certain styles or sectors to the next.  We'll