Karen Firestone has spent over thirty years honing skills applied to
the investment world, while at the same time navigating a path through the work/familyscape. She considers many issues from an unusual angle, including stock market movement, factors facing professional women today, and how to think in simple terms about some complex financial structures. Karen shares her observations in posts that also appear in the Harvard Business Review and Huffington Post. As the CEO of Aureus Asset Management, a former fund manager at Fidelity Investments, and the mother of four grown children, Karen has a rare perspective into which she injects humor and some irreverence.

WSJ: New Worry for CEOs: Rising Costs From Metals to Meat

We are finally seeing articles about how higher costs for labor, commodities, and raw materials are affecting companies.  It’s likely that earnings expectations were just too rosy and the market has adjusted to a more realistic outlook on profit margins. Read the full article in The Wall Street Journal


NYT: One Cause of Market Turbulence: Computer-Driven Index Funds

When index funds comprise 40% of all trades, and they are only selling, with less traders active (not passive), there are fewer bids on the other side, forcing prices down even further.  This is an obvious, but very real, hazard of passive investing trends. Read the full story in The New York Times


Economist: Bets on low market volatility went spectacularly wrong

Here is an article from The Economist that details the dangers of structured products, such as Credit Suisse’s XIV which collapsed spectacularly last week. Banks like to sell these products to institutional and high net worth clients because they generate fees for the banks and often times are not well understood by the clients –…


Economist: GE’s flow of financial information has become fantastically muddled

The many problems with GE’s financial reporting has made it difficult for both managers and investors of GE alike to assess the health of the conglomerate. At Aureus, we feel it’s important provide clear and concise client reporting so that both ourselves and our clients are able to properly assess their current financial situation and have the necessary…


NYTimes: HuffPost, Breaking From Its Roots, Ends Unpaid Contributions

If the HuffPost is dropping their non-paid contributors, costs go way up, signaling the inevitable end of free access to websites like this.  They must believe that readers will pay for content. If not, can they survive on advertising?  After 30 years, we are about to find out who can generate profitability in digital media….


WSJ: BlackRock CEO to Companies: Pay Attention To ‘Societal Impact’

While ESG funds are being raised at a rapid pace, they represent a very small percentage of stocks and therefore their influence on management teams is questionable. However, BlackRock is one of the largest investors in stocks through its passive iShares index platform, which heretofore had itself taken a largely passive stance with regards to…


The Economist: Investment banks’ cull of company analysts brings dangers

This article from The Economist lays out the reasons for and potential fall-out from MiFID2. If the new regulation ultimately results in fewer sell-side analysts covering stocks, it should increase the opportunity set of mis-priced securities for those who continue to pursue active investing, such as ourselves. Read the full article in The Economist