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How Fast? Historically Fast. Market drop

Last week as I was watching the markets I was thinking that this must be the fastest 30% drop in history. As things happen, I didn’t have the time to do the research, but luckily others did. The folks at Bank of America did the leg work, and CNBC did the reporting to show that our pandemic has broken the previous record from 1934. It is amazing how many of these drops occurred during the Great Depression compared to only 1 during the Great Recession. And to combat this, the US Government is debating (as of this writing) the largest stimulus package ever to help the economy recover. Many...

A tale of ignorance and danger of rash decisions

Colin Ward

21 Mar 2020

A Tale of Ignorance And Danger of Rash Decisions

Who is Zoom Technologies Inc.? Markets are “efficient”, right? Let’s all just take a deep breath In my last article, I made a mistake that thousands of investors are making. Now, A case of mistaken identity is shooting or zooming an unlikely stock to unreasonable highs. It’s a story of irrational exuberance or investor stupidity. Either way, it’s a reminder of the power of fear during unprecedented times. I referenced Zoom Video Communications, Inc. by the incorrect ticker: ZOOM instead of the correct one, ZM. Well, the ticker, ZOOM, refers to Zoom Technologies Inc. Who is Zoom Technologies Inc.? Put simply, they’re nobody. My research suggests that they are a...

Coronavirus is a beta test for remote work

Colin Ward

18 Mar 2020

Coronavirus is a Beta Test For Remote Work

Remote-work software companies Quarantine may kickstart remote work We will emerge from Coronavirus, but do we evolve or resume? My most positive outlook Ease client concerns during this challenging time Pandemonium was palpable last week as many of us began to feel a creeping sense of unease around the rate at which the Coronavirus is spreading. All over social and mainstream media outlets, we saw massive unrest as people cleared supermarket shelves grasping on to some semblance of security at this uncertain time. Still, there are opportunities to be had during this systemic COVID-19 quarantine. No, I don’t mean shorting the market. Though, making money off crises is about as...

Yon Perullo

18 Mar 2020

How’s VaR working out?

If there is one theme that underpins our writing on risk, it is that stress testing and scenario analysis are far superior to value at risk (VaR) measures. It is clear that VaR is not made for the market moves that we have been experiencing. If we use normal distributions, which is the foundation of VaR, a single -10.9% move on the S&P 500 (as occurred today, March 16, 2020) would be about a 13-standard deviation event. Meaning that it should occur once in the existence of the planet. We just had a events of -11 and -13 standard deviations a separated by a single trading day (not to mention...

Nick Davidson

16 Mar 2020

Can a plan have too many Funds

Key Talking Points Can the menu be too small? A Diversified Plan Menu Summary It shouldn’t be surprising that a plan which had over 200 options for participants to choose from in its plan menu is settling its lawsuit. More than 10 times the average plan! The issue of plan menu size can be part of a productive conversation with any plan sponsor.(The original lawsuit against Invesco was primarily for stacking the plan with proprietary funds, although part of the complaint was about the size of the plan menu.) Key Talking Points The language used in the filing against Invesco provides valuable insight into how this type of discussion can...