The Best (and Worst) of John Rekenthaler, in His Own Words

John Rekenthaler has retired after a 36-year career at Morningstar. He had been writing the Rekenthaler Report, in which he digs into market trends, what’s working and not working for investors, and what to watch in the industry, for nearly 25 years.

The column predates Morningstar.com in its current form, but one of the earliest Rekenthaler Reports on record is from Jan. 27, 2000, bearing the title: “Is the S&P 500 a Value Fund?”

John wrote:

I understand the practical desire to minimize the index’s turnover. But while all this deliberating is taking place, Goldman Sachs has gone public, and JDS Uniphase and Red Hat have compiled larger stock market capitalizations than Heinz, Sears, or McGraw-Hill. Consequently, the S&P 500 finds itself lacking an unusually high number of the nation’s 500 most-valuable properties—say, about 150 of them. Several missing companies are worth more than $30 billion.

And, as you might suspect, these missing businesses have a few things in common. Nearly all of them fall into just two of Morningstar’s 10 sectors—technology and services. We’re talking nothing but ‘new era,’ baby. Which means that in comparison with the overall stock market, the S&P 500 has become light on the pricey glamour stocks and heavy in the cheap, old-era industries like cyclicals, banks, tobacco, etc. Just like a value fund.

The specifics may have changed, but even in 2025, the broader questions being asked and the skepticism with which John approached them feel more relevant—and needed—than ever.

Over the past two decades, he’s covered everything from the potential for a dot-com bust (spoiler: he was right) to the GameStop short.

Here, John shares a roundup of his most memorable columns.

How the Stock Market Really Works

• Most Stocks Stink: “For once, I wrote a decent headline. I describe the research by Professor Henrik Bessembinder, who shows that most stocks lose money during their history. Equities make money because of a few really big winners. (A reader recently told me that he found this to be my most memorable column.)”
• The Stealth Bull Market: “In this 2013 column, I argued that the bull market of the previous four years was not a ‘bubble’ caused by the Federal Reserve’s easy policies, as many skeptics were claiming. I don’t get them all right, but I did with that one.”
• The Stock Market’s Dominoes Are Falling: “I warned of potential stock market dangers in January 2022, in a year when stocks dropped 20%. This was the bookend to my covid-19 stock-prediction column, this one being as correct as the other was dunderheaded.”

Myths That Need to Be Busted

• There Is No Technology-Stock Bubble: “By 2019, many observers called technology stocks an overpriced fad, saying they had risen too far, too fast. I disagreed.
• Long Bonds Are for Fools: “An aggressive headline that proved to be entirely correct, as that date was almost exactly the peak for bond prices.”
• The Catch to High Investment ‘Income’: “This column discusses how funds often entice investors by making high ongoing payouts, at the cost of eroding their investment capital.”
• Great Investment Mistakes: The Bear Trap: “The date is 2017, but its message is timeless. There are two problems with trying to avoid stock bear markets. One, stocks rise more than they fall, so the odds are against the investor. The second lesson is perhaps even more important. If an investor moves to cash and the stock market continues to rise, the investor is loath to return until a major decline happens. He or she wants to be right! Such is ‘the bear trap.’ ”
• An 8% Retirement Withdrawal Rate?: “In which I critique the recommendation for an 8% retirement withdrawal rate, offered by the popular financial pundit Dave Ramsey.”

Reality Check on New Products and Trends

• Give Performance Fees a Chance: “A fund company launched a series of funds that had performance fees, which paid the fund extra if it beat its benchmark and which paid it less if it did not. I had always thought that performance fees were a gimmick, but I wrote a positive column anyway. That was a mistake. Those funds did not perform well, and no other fund company followed in its footsteps. I proclaimed a false dawn.”
• With GameStop, Hedge Funds Might Enjoy the Last Laugh: “Indeed, hedge funds did, as that column was published almost exactly to the day that meme stocks peaked.”
• Why SPACs Are a Racket: “Special-purpose acquisition companies, or SPACs, were once very popular with retail investors. They have since disappeared because they were bad investments. I was not the first to call them out, but at least when I did so, I did not mince words.”
• It’s Time to Consider TIPS: “I recommended that investors consider TIPS. The accuracy of that counsel remains to be seen, as the prices of TIPS haven’t much changed since I made that call.

The Big Picture

• Farewell, Mutual Funds: “This article predicted that ETFs would eventually own more assets than mutual funds. At the time, that was considered a somewhat bold forecast. Now it is regarded as reality.”
• Index Funds Have Officially Won: “A widely read column that marked the date when index funds officially owned more assets than passive funds, across both US mutual funds and ETFs, including all asset classes.”
• Why the Rich Have Become Richer: “This article is directly related to my farewell column. Over the past 40 years, the profits to capital (that is, stock market gains) have been much larger than the wage growth for labor. Since stock returns have been much higher than increases in wages, and the rich own more stocks than does everyone else, the equity markets are the main reason why the rich have, in fact, become richer.”

Looking Under the Hood

• Has Vanguard Lost its Way?: “A widely read column that was among the first in the broader media to raise the issue of Vanguard’s technology and customer-service problems.”
• How to Lose Money: Buy Digital World Acquisition Corp: “This column gathered some nasty emails (!), as Digital World was the company scheduled to buy Trump Media & Technology Group DJT. Digital World sold $77 per share at the time of that article. Today, its successor DJT sells at $34.
• About That First Eagle Case: “A fund company named First Eagle settled a case with the SEC for allegedly misusing customer assets. I thought that I did my legal homework, when predicting that this would be the first settlement of many. I was wrong; First Eagle ended up being the only such settlement. I would not be so cavalier about offering legal opinions after that.”

… And One More for Good Measure

• What Has Been Manhattan’s Return?: “In which I attempt to calculate the total return on the (allegedly) $24 purchase of Manhattan that was made 400 years ago. A fun way to test the power of compound interest.”