May 19, 2019
Interactive, Stocks, Investing
Another engaging interactive to dispel the notion that one can time the market.
Here's the description of the game (from Betterment) which is about 3-4 minutes long and can be played multiple times:
Many investors believe (or act as if they believe) they can beat the market through timing their deposits or asset allocation. Our interactive simulation puts you in the driver’s seat to decide whether to invest or sell based on actual New York Times headlines since 1928.
May 12, 2019
Investing, Question of the Day, Stocks, Index Funds
Exxon Mobil went from #2 to #11
Wal-Mart Stores went from #6 to #12
Microsoft went from #7 to #3
Johnson & Johnson went from #11 to #9
Compare the list in 2000 to 2018. Write one sentence that describes how the economy has changed in the past 18 years based on changes in the largest companies. Which industries have grown the most?
How many of the top 12 companies on the list in 2018 are you familiar with?
How has the value of the three companies that...
May 10, 2019
Investing, Stocks, Advocacy, Credit Cards, Mortgages, Retirement
We will start with Investing this week because this week's biggest news is today’s Uber’s IPO. Here is all you need to know about the one of the largest IPOs! (NYT)
Uber was priced at $45/share--the “low end,” and keeping the valuation at $82B, well below the expected $100B. Looks like “low end” wasn’t low enough. Watching CNBC Squawk Box as the market was “building the book” before the first trade was fascinating as the...
May 08, 2019
Investing, Question of the Day, Stocks
Answer: Nike, by a long shot!
Nike closed the trading day on May 1 at $85.27, up $35.77 on June 1, 2014, for an average annualized return of 19.35%. Under Armour, on the other hand, closed the trading day on May 1 at $22.82, DOWN from its price of $29.75 five years earlier for an average annualized loss of over 2%.
Here's the chart:
What factors do you think contribute to the very different market performance of these companies?
Which products do you personally prefer?...
May 07, 2019
Index Funds, Chart of the Week, Stocks, Investing
From Innosight's research on Creative Destruction:
Key insights include:
The 33-year average tenure of companies on the S&P 500 in 1964 narrowed to 24 years by 2016 and is forecast to shrink to just 12 years by 2027 (Chart 1).
Record private equity activity, a robust M&A market, and the growth of startups with billion-dollar valuations are leading indicators of future turbulence.
A gale force warning to leaders: at the current churn rate, about half of S&P 500 companies...
Apr 19, 2019
Investing, Podcasts, Stocks, Behavioral Finance
What follows is a summary of the Investing panel discussion held at the NGPF Summit in mid-March 2019 in San Francisco. The all-star panel included Bill Bernstein, financial theorist, neurologist, and financial adviser/author, and Jonathan Clements, WSJ columnist, author, educator and blogger at the HumbleDollar.com. Apologies for the inconsistent sound quality.
4:25~12:42 The stock market game’s traps
12:42~24:20 Importance of friends and...
Apr 14, 2019
Interactive, Stocks, Index Funds
Hat tip to Christian for discovering this interactive from Bloomberg that will get those day traders in your classroom excited.
Here's the game unfolds:
A stock price chart for an undisclosed company scrolls across the screen for 30 seconds.
When you want to buy the stock you hold down the touchpad. You release the touchpad when you want to sell.
You have the opportunity to make repeated buy/sell decisions during the course of the 30 seconds.
At the conclusion of the...
Apr 10, 2019
Stocks, Question of the Day
Tired of those annoying TV ads comparing networks? Well it's about to get worse...a lot worse!!!
With 5G launching on April 11th, here's a look at how the two major wireless carriers have fared over the PAST five years. What do you think the future holds?
Why do you think Verizon has performed better than AT&T since January 2018?
How do you think these two companies make their money? What is the key metric to the health of their businesses?
Apr 09, 2019
Chart of the Week, Investing, Stocks
Hat tip to NGPF Fellow Charles Kafoglis for sending a note to me highlighting this set of charts from Callan Associates. Think of the chart below as the periodic table for stock market returns for various asset classes (think stocks and bonds, U.S. based and international). Each column represents one year and each box represents a specific asset class which has a specific color assigned to it. The percentages reflect the returns for that specific asset class. There's a lot to unpack here but...
Apr 03, 2019
Chart of the Week, Investing, Stocks
Hat tip to Morning Brew for highlighting this chart in their daily newsletter.
With a flood of IPOs about to hit the market (Pinterest, Uber and AirBNB to name a few), I thought this chart was an important reminder that not every tech IPO goes BOOM!
Why do you think that companies like GoPro and Fitbit have struggled so much as public companies? (Hint: are there other products similar to theirs?)
Square is a top performer. Do you know what business they are in? Do...
Mar 20, 2019
Video Resource, Credit Cards, Financial Scams, Compound Interest, Investing, Stocks
I wanted to share some cool new videos that we have come across in our travels:
Three Psychological Tricks to Help You Save Money (TED Talks; 5 minutes); hat tip to Yanely for connecting us to Wendy; hope to have her on podcast in the future.
Backgrounder on the Payday Lending industry (PBS NewsHour; 4 minutes); good opportunity to discuss the financial pitfalls of payday lending, it's fee structure and the role of regulation in consumer protection.
Mar 11, 2019
Question of the Day, Investing, Stocks
Hat tip to Beth Tallman for the idea for this question!
Snap just marked its second anniversary since going public on March 2, 2017 at a price of $17/share. Today it trades at $9.48, a 44% drop from its IPO price so investors who bought the IPO hype are licking their wounds.
Facebook went public on May 18, 2012 at a price of $38/share. Two years later, it was about $61/share, a 60% increase from its IPO price and as of March 8, 2019 the stock trades at $169. ...
Feb 26, 2019
Chart of the Week, Stocks
Great graphic that displays the economic transformation that has occurred since 1900 based on the industry composition of the stock market.
From Visual Capitalist:
What industry has seen the most dramatic decline since 1900? Can you explain the change in that industry?
Which industry has seen the largest increase (and didn't even exist in 1900)?
What do you think this chart would look like in 2100? Explain your reasoning.
Feb 19, 2019
Chart of the Week, Investing, Stocks, Behavioral Finance
From Retirement Field Guide, comes a chart showing the stock chart for an S&P 500 ETF (which tracks S&P 500 Index) from 2012 to present with quotes from noted pundits.
Click on the chart to get a larger version that is easier to read:
How much has the S&P 500 risen over this period?
Why do you think that so many experts may have been expecting a crash in 2012? (Hint: what happened a few years earlier?)
What is it about the stock market that makes us...
Feb 12, 2019
Interactive, Investing, Stocks, Index Funds
Hat tip to Vadas at Abnormal Returns for pointing out this article from Behavioral Investment about why we make stupid investment decisions.
The article lays out nine reasons why normally rational, thoughtful people make what he describes as "sub-optimal" investment decisions. As I read through the list, I realized how our investing game STAX (over 160,000 game plays since November launch) gives students an opportunity to make a lot of stupid decisions which they hopefully will learn from...