Lego bricks are a better investment than gold bricks

"We find that LEGO investments outperform large stocks, bonds, gold and other alternative investments, yielding the average return of at least 11% (8% in real terms) in the sample period 1987-2015," write the authors of a study titled LEGO - The Toy of Smart Investors. "Small and huge sets, as well as seasonal, architectural and movie-based sets, deliver higher returns. LEGO returns are not exposed to market, value, momentum and volatility risk factors, but have an almost unit exposure to the size factor. A positive multifactor alpha of 4-5%, a Sharpe ratio of 0.4, a positive return skewness and a low exposure to standard risk factors make the LEGO toy an attractive alternative investment with a good diversification potential."

[via Bonnie Burton's article, "Lego bricks outshine gold bars as investments, study finds" from CNet, January 28, 2019]

Image: 299 Warm Gold, Drum Lacquered/Gold Metalized/Gold Laquered / Metallic Gold, by Ryan H./Twitter. Attribution 2.0 Generic (CC BY 2.0) Read the rest

If you bought shares in all the companies Trump trashed since taking office, you beat the market

Barry Ritholz maintains two stock indices: the Oligarch Index contains "companies that Trump liked" in his public communications; the Drain the Swamp index has "companies that Trump trashed." Read the rest