Only Suckers Work More Than An Hour A Day: Bespoke Investment Group

Why work all day when you can work...one hour a day?

Author:
Jon Shazar
Updated:
Jan 14, 2019
Original:
Oct 15, 2015

This could be you RIGHT NOW.

Are you still holding stock? If so, too bad. You’ve already missed your chance to build a 5% annual return and then take the rest of the day off.

Investing in the market at 10 a.m. Eastern time and selling at 11 a.m. has turned out to be the most successful hour to trade so far in 2015, according to Bespoke Investment Group. The research firm took a look at how a $100 investment in the S&P 500 would have fared in hourly intervals over the course of this year. Only three time frames would have yielded gains.
According to Bespoke’s data, if you invested in the market at 10 a.m., 1 p.m. or 2 p.m. every day in 2015 and sold an hour later, your investment would have increased so far this year.

The Best Hour to Be Invested in the Market this Year Is… [WSJ MoneyBeat blog]

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But...

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Felix Salmon put up a great note from a reader about investment banking conflicts; it's fantastic so go read it. But this is a tiny bit unfair: You and many other commentators seem to have some misconceptions about what exactly large, sophisticated clients such as El Paso’s board hire investment bankers to do. Its always funny how, in the minds of pundits everywhere, those conniving and all-powerful one-percenters who sit on corporate boards become impotent and completely incapable of independent decision-making once an investment banker walks into the room. The basic argument is that repeat-player investment bankers provide value not by telling brainless executives whether to accept or reject a merger, but by providing intelligent decisionmakers with access and relationships, and relationships come with conflicts. As he says: When sophisticated clients (management teams, company boards, PE funds, etc) hire M&A bankers, they typically hire them for two main reasons (in addition to the legally required shams referred to as “fairness opinions”): Execution and Connections. Of those things, connections are higher-value and inextricable from conflicts. If you're hiring someone to sell you to Company X, a bank who has done work for Company X - heck, who owns 20% of Company X - is the bank you want. And sure maybe their "conflict" will cause them to advise you to sell for a lowball price so that Company X appreciates them more but, hey, nobody's forcing you to take their advice. So, yes, this is all true. But he's maybe a little too harsh on the commentators and their misconceptions.