Introduction to the Topics Section
The Topics section is a collection or library of what we view as the most important investment ideas and concepts. It does not contain any current events commentary but instead builds a framework and then uses that framework to address long-term, overarching investment topics. It is most easily read in the order shown in the drop-down menus because concepts in its later parts build on those developed in its earlier parts, particularly in the Basics section.
We don't view ourselves as "thought leaders" but rather as "bullsh#t debunkers". In the Topics section, Frontier Financial pulls back the veil of mystery with which the investment industry surrounds itself, much like when Toto pulled back the curtain to reveal the Wizard of Oz!
Each topic area contains three sections, available by clicking on different tabs:
1) Summary: This contains key points and conclusions and is short, usually about 600 words. This is the "Cliff Notes" or "Coles Notes" version.
2) Main: This is a somewhat longer discussion and includes some charts and tables to help convey key concepts. In our experience a picture can definitely be worth a thousand words, especially when accompanied by an apt description. Don’t worry, this section is heavy on facts and evidence but very, very light on statistical and mathematical terminology, even when those methods underlie its conclusions.
3) Details: This contains more detail and any statistical and mathematical analysis underlying the conclusions in the Summary and Main sections, along with references to other articles. This section is intended for those interested in a deeper dive into the topic.
As much as possible, we use publicly available data and published research to derive and support our results and conclusions. Whenever others' research leaves important questions unanswered, we "dig in" and conduct our own research. The spirit that pervades the Topics library is that of a curious traveller recently arrived in a new destination, who wants to know more about their environs – in this case, direct answers to the big questions about investing.
We believe, and hope you’ll agree after perusing this library, that the most important investment concepts are actually quite straightforward and easily understood once we eliminate the complexity the industry employs to confuse clients and obscure those concepts. To quote Michael Lewis from The Big Short, in our opinion the single most informative and entertaining book about the 2008 global financial crisis:
We don't view ourselves as "thought leaders" but rather as "bullsh#t debunkers". In the Topics section, Frontier Financial pulls back the veil of mystery with which the investment industry surrounds itself, much like when Toto pulled back the curtain to reveal the Wizard of Oz!
Each topic area contains three sections, available by clicking on different tabs:
1) Summary: This contains key points and conclusions and is short, usually about 600 words. This is the "Cliff Notes" or "Coles Notes" version.
2) Main: This is a somewhat longer discussion and includes some charts and tables to help convey key concepts. In our experience a picture can definitely be worth a thousand words, especially when accompanied by an apt description. Don’t worry, this section is heavy on facts and evidence but very, very light on statistical and mathematical terminology, even when those methods underlie its conclusions.
3) Details: This contains more detail and any statistical and mathematical analysis underlying the conclusions in the Summary and Main sections, along with references to other articles. This section is intended for those interested in a deeper dive into the topic.
As much as possible, we use publicly available data and published research to derive and support our results and conclusions. Whenever others' research leaves important questions unanswered, we "dig in" and conduct our own research. The spirit that pervades the Topics library is that of a curious traveller recently arrived in a new destination, who wants to know more about their environs – in this case, direct answers to the big questions about investing.
We believe, and hope you’ll agree after perusing this library, that the most important investment concepts are actually quite straightforward and easily understood once we eliminate the complexity the industry employs to confuse clients and obscure those concepts. To quote Michael Lewis from The Big Short, in our opinion the single most informative and entertaining book about the 2008 global financial crisis:
It’s too much to expect the people who run big Wall Street firms to speak plain English, since so much of their livelihood depends on people believing that what they do cannot be translated into plain English.
We also believe that you’ll come to appreciate the benefits of clear thinking about any investment topic. Enjoy!
2022 Topics Section update:
Only the first five parts of the Basics section have been posted in the Topics Library. We're hard at work on the rest, but took a wide detour in 2021 to conduct some original research whose results will soon appear in the library's Active Management section. (We didn't find our questions aptly answered by others' research, so we "dug in" and did our own!)
If you're interested, you can view those research results online as working papers. Neither paper contains any equations and both are jargon-free. The first paper summarizes the last thirty years of active equity management among US-domiciled mutual funds and institutional managers, and is available here . Its main body is only 11 pages long, though with appendixes its total length is 32 pages.
The second paper summarizes the effect of different turnover rates (i.e. changes in portfolio holdings) on the returns of US-domiciled mutual funds, for the same thirty-year period as the first paper. It is available here .
Only the first five parts of the Basics section have been posted in the Topics Library. We're hard at work on the rest, but took a wide detour in 2021 to conduct some original research whose results will soon appear in the library's Active Management section. (We didn't find our questions aptly answered by others' research, so we "dug in" and did our own!)
If you're interested, you can view those research results online as working papers. Neither paper contains any equations and both are jargon-free. The first paper summarizes the last thirty years of active equity management among US-domiciled mutual funds and institutional managers, and is available here . Its main body is only 11 pages long, though with appendixes its total length is 32 pages.
The second paper summarizes the effect of different turnover rates (i.e. changes in portfolio holdings) on the returns of US-domiciled mutual funds, for the same thirty-year period as the first paper. It is available here .