May 2018

Never Begin With the End in Mind

The thing about biases is that they’re human, so they’re seen in every walk of life. In who we choose to be friends with, in what news we read, in investing, and in sports. In Michael Lombardi’s new book Gridiron Genius, which I highly recommend, he talks about all of the biases that can infect a…

Animal Spirits: What it Takes to Be Wealthy

On this week’s Animal Spirits, we discuss: Jack Bogle’s battle… …All hedge funds are not bad Active vs passive? Yes. Again? Yes.  Thinking outside the box What happened to Einhorn No really, what happened? Buyer beware Another athlete got ripped off by his advisor By 35 years old… How much money do you need to…

Do Long-Term Investors Need (Long-Term) Bonds?

A reader asked Ben: If the goal is long-term investing (let us say I will not look at this money for the next 15 years), then does it still make sense to invest in bonds since equities outperform bonds over a long period of time? I would agree with Ben’s thoughts, which is that the…

On Second Thought…

In 1965, AT&T and General Motors represented 14.5% of the S&P 500. Today, the top five names, Apple, Microsoft, Alphabet, Amazon, and Facebook make up less than that. The percent of market cap made up by the ten largest names was cut in half from 1962-1980, and has held steady for the better part of…

A Different Game

This weekend I listened to Bill Simmons interview Lou Adler, a long-time Lakers season ticket holder. They cover a lot of ground and at one point they talk about Kareem going down in the 1979-1980 finals. This was a devastating injury. Kareem was the best player in the league and was averaging 32 points and…

These Are the Goods

Articles The latest embarrassment for a former star who has not bested the stock market since 2009. By Michelle Celarier The passage of time has also dimmed the memories of the pain of the crisis, such that most investors seem to believe they would stay the course through another such crisis, whether or not they…

Truth is Stranger than Fiction

Imagine Jamie Dimon made a killing shorting J.P. Morgan stock during the Great Financial Recession? And imagine he didn’t get in any trouble for it? This actually happened 90 years ago at Chase Manhattan Bank, while Albert Wiggin was at the helm. This story was marvelously told in Once in Golconda, by John Brooks. Beginning…

Stanley Druckenmiller’s Big Mistake

Michael Steinhardt once said “Nothing gives a better feeling to a manager than making money for his or her investors when almost everyone else is losing.” I’d imagine that there are few worse feelings for a money manager than not keeping up when everyone around you is winning. The tech bubble is the modern day…

Animal Spirits: Podcast Boot Camp

Stories discussed Hedge fund boot camp The millionaire secretary… …And how she got there A bubble in ETFs makes no sense.  Don’t blame ETFs Why people won’t spend down their assets… …This “study” though. Tech IPOs can be overvalued Credit card points The Depression of 2008? The buyback counter.  Lend money to Argentina for 100…

These Are the Goods

Articles When you realize the magnitude of happenstance and serendipity in your life, you can stop judging yourself on your outcomes and start focusing on your efforts By Nick Maggiulli Quantifying good advice can be difficult because there are no counterfactuals. By Ben Carlson Historical risks you can study are dwarfed by risks you actually experience….