Thoughts {10.21.15}

We've now entered the best six months of the year for equities and it seems on cue the markets began rallying at the beginning of the month.  Stocks have gained about 6% so far in October.  They've erased much of the late summer decline but now face some more significant resistance.   Stocks are also now slightly overbought.  I'll have more to say about this next week.

Go read over at "Pragmatic Capitalism" an article on "Why Indexing Works".  I thought this was the relevant point:  "One of the problems with stock picking is that the gains tend to be highly skewed.  Your top performers produce most of the returns.  The distribution is very uneven.  So, it’s not like you’re just trying to pick the stocks that outperform the average.  In order to create consistent market beating returns you basically have to know which stocks will be in the 20% of the outliers.  Add on taxes and fees and you’re climbing a huge uphill battle."

The fantasy sports business is now being investigated.  Its hard for me to see the distinction between betting on players and betting on horses and now it looks like the authorities are starting to ask the same questions.  My guess is that we're going to see changes in how this works but betting on fantasy teams is unlikely to go away.  Too much interest and the genie is out of the bottle on this.  If it's not regulated it will probably go underground or overseas.  I think at some point you may be able to buy interests in professional athletes like you do shares of stocks.  I'll bet a guy like Tom Brady could sell a portion of his future earnings now and raise a significant chunk of cash upfront.  In that vein and for a humorous look at sports and the Street go read "10 Sports Terms That Help Explain Wall Street".  

And the Cubs are down three games to none to the Mets.  Gotta win tonight.  Back tomorrow.