February 2018

Seeing Your Blind Spots

“The first principle is that you must not fool yourself — and you are the easiest person to fool.” -Richard Feynman Anybody who has ever tried to beat the market knows that understanding psychology is just as important as understanding a business. You can know a company’s return on equity to the third decimal and what management…

These Are the Goods

Articles An investor without a faith is doomed. By Dan Egan The fully-invested bear By James Montier Humans are social animals. But the internet is a cesspool. By Nicholas Thompson and Fred Vogelstein If there were inter-market relationships we could set our watches by, everyone would always know what time it was. By Josh Brown…

Animal Spirits: The Meltdown

On today’s show we talk about: Recent market volatility What held up well (basically nothing) Stories we tell Who to blame How noobwhale investors will react to a bear market Non-correlated strategies Where hedge fund fees go Listen here: A close look at where the money flows suggests a more complicated story Barry with ex-CIA…

A Worthwhile Timesuck

I spend way too much time on Twitter. I’ve never attempted to figure out exactly how many hours a week that I’m on the platform because it would be impossible, frightening, and probably wouldn’t change my behavior. I already knew this, but it really crystalized for me while reading Cal Newport’s Deep Work. A few…

An Unprecedented Decline

Conventional wisdom goes that tops are a process. This makes sense when you think about market psychology. In a rising market, every pullback is bought, which conditions us to expect future dips to behave like previous ones. But eventually, bounces are met with less enthusiasm and the rallying cry of buy the dip morphs into sell…

These Are the Goods

Articles Bonds are just a cheap form of insurance around your equity slice. By Cullen Roche Real returns thus far in this decade are higher than they were in the 1980s By Ben Carlson You were also close with Marlon Brando? With Chris Heath and Quincy Jones There’s a fascinating case study here on how…

35 Steps To a Market Bottom

-1% Mock the permabears -2% Meh -3% Yawn -4% Off the highs -5% Pullback -6% Healthy correction -7% Buying opportunity -8% Stay the course -9% This too shall pass -10% Correction territory -11% I’m a long-term investor -12% Stocks always come back -13% Don’t panic -14% Draw lines on a chart -15% Look for attractive…

Animal Spirits: Noobwhale

On this week’s Animal Spirits with Michael & Ben we discuss: Friday’s selloff (we tape Monday morning) How endowments gauge their success. The crown jewel of the alternative investing universe. Whether or not financial advisors should be selecting fund managers Cyrpto bros and why women are better investors. Some cool charts How to think about…

Your True Risk Tolerance

The following is a public service announcement: If you weren’t worried this morning you don’t own enough stocks. — Michael Batnick (@michaelbatnick) February 6, 2018 This morning it appeared as if we were headed for a third consecutive day of the Dow declining 500 points, something which has never happened before. Sure 500 points ain’t…

A Few Charts And A Few Thoughts

Stocks gained 6% in the first 22 sessions of 2018. In the last two, they gave it all back, and then some. This is what Aristotle meant when he said “stocks take the stairs up and the elevator down.” The simplest explanation for the way markets move is this: Rising prices attract buyers and falling…