Articles From Jay D. Franklin (100)

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  • 100

    Risk Savvy—How to Make Good Decisions

    1,459
    by Jay D. Franklin — Tuesday, July 22, 2014

    A New Book by Gerd Gigerenzer Innumeracy is a word coined by cognitive scientist Douglas R. Hofstadter in the early 1980s to describe a lack of basic mathematical ability as it applies to everyday life. Later ...Read More

  • 99

    Is There a Manager Risk Premium?

    3,473
    by Jay D. Franklin — Friday, June 20, 2014

    A risk premium is the return in excess of a reference rate that an investment is expected to provide. At Index Funds Advisors, Inc., we often speak of three different equity-related risk premiums. First, the ...Read More

  • 98

    A New Low for CNBC

    2,297
    by Jay D. Franklin — Friday, March 21, 2014

    With nothing better to do the other night, I decided to try out CNBC’s new series, Money Talks, a reality show that follows the antics of one Steve Stevens and his company VIP Sports of Las Vegas which ...Read More

  • 95

    Taking Stock in Pot? Beware!

    1,278
    by Jay D. Franklin — Thursday, August 29, 2013

    With medical marijuana now legal in twenty states and recreational marijuana approved in two states, some people may sniff an investment opportunity. Not so fast says the Financial Industry Regulatory ...Read More

  • 91

    The Capitalism, Inc. Stock Certificate

    5,107
    by Jay D. Franklin — Tuesday, May 14, 2013

    At Index Funds Advisors, we are sometimes asked if there is any company whose stock we would recommend buying. Our tongue-in-cheek answer is shown below: The brainchild of IFA’s founder and president, ...Read More

  • 90

    Style Drift on Steroids

    1,432
    by Jay D. Franklin — Tuesday, May 7, 2013

    In Step 6 of IFA’s 12-Step Recovery Program for Active Investors, we analyze the problem of style drift, the tendency of active managers to buy securities outside of their mandate. Normally, style drift ...Read More

  • 89

    The Rule of 72: A Mathematical Thing of Beauty

    1,525
    by Jay D. Franklin — Tuesday, April 30, 2013

    As an admitted math geek, I never tire of learning new tricks that simplify otherwise complex calculations. Far and away my favorite trick is known as “the rule of 72,” which states that if you are ...Read More

  • 88

    Taking Stock of the STOCK Act

    1,160
    by Jay D. Franklin — Wednesday, April 17, 2013

         In November of 2011, 60 Minutes did an eye-opening expose’ of members of Congress who profited from stock trading based on information.  The truly stunning aspect of this story ...Read More

  • 87

    Vanguard Makes the Case for Indexing

    1,684
    by Jay D. Franklin — Tuesday, April 16, 2013

         As someone who follows the world of passive investing quite closely, one publication that I eagerly await every year is The Case for Index-Fund Investing1 from Vanguard Research. As with ...Read More

  • 86

    Another Arithmetic Lesson from William Sharpe

    2,379
    by Jay D. Franklin — Friday, April 12, 2013

    Nobel Laureate William Sharpe is one of the academic linchpins of IFA’s investment philosophy. A year after winning the Nobel Prize in 1990, he penned a brief and elegant article1 showing that as whole, ...Read More

  • 85

    1Q/2013: The Quarter in Review

    1,176
    by Jay D. Franklin — Thursday, April 4, 2013

    The first quarter of 2013 was a quarter in which risk was rewarded. Once again, the market climbed a wall of worry centered on government shutdowns and budget sequestrations. On the international front, we ...Read More

  • 84

    What's a Mother to Do?

    1,277
    by Jay D. Franklin — Wednesday, April 3, 2013

    Yahoo!'s Daily Ticker is one of the few financial Websites that I make a point to visit on a daily basis. The three to six minute interviews and commentaries are always entertaining and sometimes very ...Read More

  • 83

    Momentum: A Fourth Factor

    2,429
    by Jay D. Franklin — Monday, April 1, 2013

    Throughout IFA’s Website, you will find references to the three-factor model formulated by Professors Eugene Fama and Ken French, which says that the expected return of a broadly diversified stock ...Read More

  • 82

    Hedge Funds: A Deeper Look into their Returns

    1,738
    by Jay D. Franklin — Wednesday, March 27, 2013

    Despite the dismal results delivered to their investors since inception1, hedge funds have continued to grow, reaching a record $2.25 trillion by the end of 2012, according to Hedge Fund Research2.  At ...Read More

  • 80

    Dow 20,000? Not Quite Yet!

    1,437
    by Jay D. Franklin — Monday, March 11, 2013

    Our latest example of an unfulfilled prediction comes from James Altucher of Formula Capital who stated a year ago on Yahoo's Daily Ticker that the Dow would go to 20,000 within a ...Read More

  • 77

    Betting Against Buffett: So Far Not So Good

    1,694
    by Jay D. Franklin — Tuesday, February 5, 2013

    From the title of this article, you may have thought I was referring to someone who took a short position in Berkshire Hathaway. While I don’t personally know anybody who is crazy enough to have done ...Read More

  • 76

    What Some People Will Do to Beat the Market!

    1,568
    by Jay D. Franklin — Wednesday, January 23, 2013

    While hedge funds as a whole have failed to deliver their investors a higher return than T-Bills1, there are a few that have provided above-market returns. One of them is Steven Cohen’s SAC Capital, ...Read More

  • 73

    2012: The Year in Review

    1,663
    by Jay D. Franklin — Wednesday, January 2, 2013

    Unlike 2011, 2012 was a year in which risk was rewarded. It is important to bear in mind that if risk were rewarded every year, it wouldn't be risk and investors would have no right to expect a positive real ...Read More

  • 72

    New Website to Help Stop Investment Scams

    1,585
    by Jay D. Franklin — Friday, December 21, 2012

    Today, I found a basis for hope upon reading this press release describing how the Better Business Bureau (BBB) and the Financial Industry Regulatory Authority (FINRA) Investor Education Foundation have teamed ...Read More

  • 71

    Ponzi Schemes After Madoff: A Sad Story Continues

    1,665
    by Jay D. Franklin — Tuesday, December 11, 2012

    It has been almost exactly four years since Bernie Madoff was revealed as the operator of the largest Ponzi scheme in history (estimated at $64.8 billion by prosecutors). One might think that with all the ...Read More

  • 70

    Tax Rates and Stock Returns

    1,861
    by Jay D. Franklin — Friday, November 30, 2012

    With all the chatter in the financial media about the impending fiscal cliff, investors cannot be blamed for their confusion. Some investors have expressed a concern that an increase in tax rates may result in ...Read More

  • 69

    What a License Plate Reveals

    1,414
    by Jay D. Franklin — Thursday, November 29, 2012

    While driving to work today, I was racking my brain for a good topic to write about when suddenly, a black Ferrari convertible zoomed past me. Normally, I would not give that a second thought, but I could not ...Read More

  • 65

    The Impact of Bad Investor Behavior

    2,255
    by Jay D. Franklin — Wednesday, October 24, 2012

    About a year ago, Professors Brad Barber and Terrance Odean published a survey of studies from around the world (including several of their own) showing the deleterious impact of bad behavior on investors' ...Read More

  • 64

    When Two Minuses Do Not Make a Plus

    1,542
    by Jay D. Franklin — Tuesday, October 23, 2012

    As a registered investment advisor, Index Funds Advisors, Inc. is constantly solicited by mutual fund companies and ETF (exchange-traded fund) providers hoping to convince us to use their products for our ...Read More

  • 63

    The Google Earnings Debacle: The Piranhas Attack

    1,881
    by Jay D. Franklin — Friday, October 19, 2012

    At Index Funds Advisors, Inc, we often talk about the Efficient Markets Hypothesis which states that current prices incorporate all publicly available information. When new information appears, traders act on ...Read More

  • 61

    Hedge Fund Warnings from the SEC

    1,594
    by Jay D. Franklin — Monday, October 15, 2012

    Anyone who is contemplating investing in a hedge fund would do well to read the SEC's Investor Bulletin: Hedge Funds. This document instructs potential investors to not only read the fund's offering memorandum ...Read More

  • 60

    Beating a Dead Horse

    1,846
    by Jay D. Franklin — Friday, October 12, 2012

    Once again, the S&P Indices versus Active Funds (SPIVA®) Scorecard shows the dismal story for active management getting worse and worse. For domestic equity funds in the last 12 months, 86.0% failed to ...Read More

  • 58

    A Problem with Jack Bogle? I Don’t Think So!

    2,442
    by Jay D. Franklin — Tuesday, September 11, 2012

    For anyone who works in the investment advisory business, particularly on the passive side, John (Jack) Bogle is a name held in the highest esteem. A pioneer in the realm of indexing, the founder and longtime ...Read More

  • 57

    Amsterdam: Where It All Began

    2,120
    by Jay D. Franklin — Monday, August 13, 2012

    In his magnificent work, The Birth of Plenty—How the Prosperity of the Modern World Was Created, William Bernstein outlines the four necessary conditions for the massive growth of wealth experienced over ...Read More

  • 55

    Caught Short! A Saga of Wailing Wall Street

    1,720
    by Jay D. Franklin — Thursday, August 2, 2012

    Continuing with our series of blogs on books in the financial humor genre, we will take a quick look at Caught Short—A Saga of Wailing Wall Street by the iconic singer, dancer, actor, comedian, and ...Read More

  • 53

    A Busy Week in the World of High Finance

    1,640
    by Jay D. Franklin — Thursday, June 28, 2012

    This is one of those weeks where we have so many juicy stories that I truly don’t know where to begin. How about another Madoff story? At last, we have the long-awaited and so richly deserved punishment ...Read More

  • 51

    Reaching for Yield: Junk and Other High-Risk Bonds

    1,919
    by Jay D. Franklin — Tuesday, June 26, 2012

    In this concluding article in the series exploring different ways investors might attempt to increase the income generated by their portfolios, we look at high-yield bonds. These securities offer a higher ...Read More

  • 50

    When Truth is Stranger than Fiction

    1,447
    by Jay D. Franklin — Monday, June 25, 2012

    Once in a while, when I need a topic to write about, I browse the latest press releases from the Securities and Exchange Commission (SEC). When looking today, however, even I had to do a double-take when I saw ...Read More

  • 47

    IFA’s Concerns with IPOs

    1,835
    by Jay D. Franklin — Thursday, May 24, 2012

    While some may accuse us of hindsight for writing this blog during the unfolding of the Facebook IPO debacle in which $12.8 billion of shareholder value has been wiped out as of 5/23/2012, Index Funds ...Read More

  • 46

    A Big Bang for 401(k) Plans?

    2,028
    by Jay D. Franklin — Wednesday, May 23, 2012

    Source: NASA On rare occasions, a change so profound and significant occurs in the financial world that it is given the “big bang” designation. Examples include the 1975 abolition of the fixed rate ...Read More

  • 43

    Wall Street: the other Las Vegas

    2,387
    by Jay D. Franklin — Wednesday, May 2, 2012

    About a month ago, I wrote about Nicolas Darvas, a world famous dancer who claimed that he made $2 million in the stock market. This claim was vigorously disputed by the New York State Attorney General, Louis ...Read More

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