SEC to End Five-Cent Spreads on Small-Company Stocks

It didn’t receive much in the way of attention, but last week the U.S. Securities and Exchange Commission (SEC) announced its intention to end the pilot program testing five-cent bid/ask spreads. The program mandated minimum quotations and trading increments for stocks of certain smaller companies. It was originally scheduled to expire on October 2, 2018….

 

Paying a Premium to Take on More Risk

Would you willingly pay $1.25 for something worth $1.00? This is not a trick question. The data showing the current price and the actual value is clearly stated and easily accessible. Knowing this, would you pay $1.25 for something worth $1.00? In a world operating in accordance with the efficient market hypothesis (EMH), such price…

 

Coming Out Ahead by Doing Less

It’s easy to adhere to an investment strategy when you don’t have to do very much. Such is the case with the approach I use to manage my 403(b) account, which is similar to a 401(k) account. When I recently looked at my account, there was nothing for me to do. No changes were required….

 

A Checklist Can Make You a Better Investor

In discussing how his company responded to last week’s engine failure on flight 1380, Southwest Airlines CEO Gary Kelly was quoted by The Wall Street Journal as saying, “Everybody has a checklist.” Checklists have been shown to work across a variety of fields, including aviation, health care, construction and, yes, investing. Value investors Guy Spier…

 

Warren Buffett on Market Volatility, Risk and More

On my must-read list is Warren Buffett’s annual letter to Berkshire Hathaway (BRK.B) shareholders. Even if you are not a Berkshire shareholder (like I am), the observations on the financial markets and investing are often priceless. This is year was no different. Though Buffett’s comments about acquisitions received the most attention after the latest letter…

 

The Size Premium Lives, But Not for All Small-Company Stocks

One driver of stock price returns debated among research papers is the size premium. The size premium—also known as small minus big (SMB)—is the historical outperformance of small-company stocks relative to large-company stocks. The continued existence of this so-called anomaly has been called into question because of the essentially equal returns between small- and large-company…