There is a particular kind of investor who checks their brokerage account on dividend payment day the way a child checks under the pillow for the tooth fairy’s deposit. The money appears. It feels like a gift. It feels like the company reached into its vault, pulled out some cash, and handed it over as […]
The Mathematics of Why Dividends Are the Least Efficient Way to Get Paid Read More »
There is a number that investors love to throw around at dinner parties. Price to book. P/B ratio. It sounds clean. It sounds rational. You take what the market says a company is worth, divide it by what the accountants say it owns, and out comes a verdict. Cheap or expensive. Buy or pass. Except
Asset Light vs. Asset Heavy: A Tale of Two P/B Ratios Read More »
Every generation of investors falls in love with a new metric. In the 1990s it was earnings per share. In the 2000s it was EBITDA. In the 2010s it was revenue growth. Each one had its moment in the spotlight, and each one eventually revealed itself to be an unreliable narrator. Not because the numbers
There is a strange magic trick hiding in the tax code. It is not illegal. It is not even obscure. But most people walk right past it because it is dressed in the most boring costume imaginable: depreciation. The word itself is enough to make your eyes glaze over. It sounds like something an accountant
How Depreciation Can Turn a 30% Tax Bracket into 0% Read More »
There is a strange ritual that plays out every time a stock collapses after a short seller publishes a report. The company screams manipulation. Retail investors cry foul. Politicians call for investigations. Cable news anchors furrow their brows and ask whether short selling should be banned altogether. And then, quietly, months later, the SEC opens
There is a particular kind of frustration that value investors know well. You pull up the financials of Hermès or Ferrari, you see the price to earnings ratio, and you close the tab. Forty times earnings. Fifty. Sometimes more. The numbers look like a typo. Surely the market has lost its mind. Surely this will
The P/E of Luxury: Why Hermès and Ferrari Never Look “Cheap” Read More »
Most people see a price to earnings ratio of 100 and assume someone has lost their mind. A hundred years of earnings baked into a single share price. It sounds absurd. It sounds like the kind of math that only works if you close one eye and squint with the other. But here is the
Why spreading your bets might be quietly destroying the metric it was meant to improve Somewhere along the way, diversification stopped being a strategy and became a religion. The faithful recite the creed without question. Spread your bets. Own a bit of everything. Sleep well at night. It sounds wise. It sounds responsible. And for
Why Diversification is Failing Your Sharpe Ratio Read More »
There’s a peculiar gap in American finance that most people never think about. Banks love lending to massive corporations because the deals are huge and the risks are calculable. Venture capitalists chase technology startups with dreams of hundred-fold returns. But what about the company that makes industrial fasteners in Ohio? The regional logistics firm in
The Middle-Market Medic: How BDCs Keep Main Street Breathing Read More »
We’ve been here before, sort of. Remember when people thought a billion dollars was unfathomable wealth? Then we got used to billionaires. Then trillion dollar companies arrived and we shrugged. Now we’re staring at the possibility of a ten trillion dollar company, and the strange thing is how normal it already feels. But it shouldn’t
The Final Boss: What Happens to the Economy When a Company Hits $10 Trillion? Read More »