In Warren Buffett’s 2017 letter to shareholders of Berkshire Hathaway, he lays out the details of his overwhelming victory in his 10-year bet on a Vanguard S&P 500 Index fund vs. a collection of five hedge funds professionally chosen by Protégé Partners. The S&P 500 fund beat all five hedge funds by margins ranging from 2.0% to 8.2% per year annualized returns.
Today (2/2/2018), the Dow suffered its largest single-session point plunge since 2008, losing 666 points. Expressing the decline in percentage terms (2.54%) puts it at about a quarter of what we saw during the darkest days of 2008. However, even this muted level feels uncomfortable because we have become so accustomed to incredibly low volatility over the past few years, and lately, we have only seen volatility in the upward direction.
After much political drama and grandstanding, the GOP’s Tax Cuts and Jobs Act is now officially the law of the land, taking full effect in 2018. We won’t bore you here with talk about changes to tax rates or attempts to identify the winners and losers. Nevertheless, there are three changes that we consider noteworthy and have received little attention from the mainstream news outlets.