In March the gap between London and New York gold prices jumped to $60 per ounce, 40 times the typical spread of $1.50 per ounce. In times of fear, investors prefer to have their gold in New York. These extreme arbitrage opportunities have short windows. Arbitrage is one of my favorite words and economic ideas….
Category: Investing
When Simple Financial Products Win
Index investing is one of the greatest growth stories in finance. Indexing is a form of passive investing, a simple strategy–basically long-term autopilot. Why try to beat the S&P 500 when you can match it? Even Warren Buffett recommends it for others. Today, passive strategies control trillions of dollars. A segment of passive, target-date funds…
Why Some Companies Care More About Healthcare Costs
How much do healthcare costs matter to companies’ earnings? Relative to earnings they’re larger than many think. 24%. That’s the median estimated healthcare costs as a percentage of earnings for the S&P 1000 (the lesser-known index sibling of the S&P 500). I ran an analysis of data from S&P 1000 firms and filtered for those…
Metrics Matter
In the misty land of adjusted and “community adjusted EBITDA” (thanks to The We Company for backing out the “building- and community-level operating expenses,”) we are reminded that to embellish is natural. We sometimes hide our worst selves and fill our dating profiles with dogs, filters, and a professed love of poetry. Corporate structures can be…
My Lehman Brothers Experience
In September, 2008 I sat alone sipping a juice in the open town hall area of a Goldman Sachs office. My eyes were fixed on a freshly printed 4-page report from CEO Dick Fuld on the status and future of Lehman Brothers, capital positions, $600B+ in assets, tangible book value per share, value-at-risk, etc. The…