Book Bits | 11 March 2017

Rational Investing: The Subtleties of Asset Management
By Hugues Langlois and Jacques Lussier
Summary via publisher (Columbia University Press)
Many investors believe that success in investing is either luck or clairvoyance. In Rational Investing, finance professor Hugues Langlois and asset manager Jacques Lussier present the current state of asset management and clarify the conundrum of luck versus skill. The core of Rational Investing is a framework for smart investing built around three performance drivers: balancing exposure to risk factors, efficiently diversifying bad luck, and taking advantage of relative mispricings in financial markets. With clear examples from model multi-asset-class portfolios, Langlois and Lussier show how to implement performance drivers like institutional investors with access to extensive resources, as well as nonprofessional investors who are constrained to small-scale transactions.
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US Private-Sector Hiring Picked Up In February

Companies added more workers to payrolls in February, the Labor Dept. reports. Private-sector payrolls increased 227,000 last month, modestly higher than January’s revised 221,000 advance. A second month of robust expansion of the labor market gives the Federal Reserve another reason to hike rates at next week’s monetary policy meeting. But while the monthly change has rebounded this year after weak growth in 2016’s third quarter, the year-over-year trend was unchanged last month, holding at a relatively subdued increase.
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ADP Reports Sharply Stronger US Jobs Growth In February

US companies added workers at a blistering pace in February, according to the ADP Employment Report. Private payrolls increased 298,000, far above the 183,000 consensus forecast via The gain is the strongest monthly increase in nearly three years. Today’s update also lifted the year-over-year trend in payrolls for the second straight month. If the bullish data is confirmed in Friday’s official jobs report from Washington, the news will further boost confidence for expecting that the Federal Reserve will raise interest rates at next week’s monetary policy meeting.
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Is US Economic Growth Slowing In Q1?

Yes, according to Tuesday’s revised GDP estimates from the Atlanta Fed and CNBC’s Rapid Update survey data. The Capital Spectator’s new economic projection is also anticipating a weaker pace of growth vs. last year’s fourth quarter. It’s too early to say for sure if the weaker forecasts are accurate (quite a lot of Q1 data is still a mystery at this point). But it’s fair to say that the prospects for a robust firming in the macro trend in the kick-off to 2017 is looking a bit wobbly compared with the previous review of GDP estimates from two weeks ago.
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Global Market Index Edges Higher For 6th Straight Week

Powered by modest gains last week in US and developed-market stocks, an investable version of the Global Market Index (an unmanaged benchmark that holds all the major asset classes in market-value weights) inched up 0.1% in the first week of March. The benchmark has advanced in every week since late January — the longest run of non-stop weekly gains in more than two years.
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