February 2018

Animal Spirits: The Closet Indexer

On today’s show we talk about: Berkshire’s 2017 shareholder letter Will Berkshire Hathaway eventually get broken up by activists? A diversified portfolio may not help investors much this year When stocks and bonds fall This is what life without retirement savings looks like.  Overcoming a late start to saving for retirement.  Millennials are saving for…

Why Doesn’t More Money Make Us Happy?

“I wish everyone could get rich and famous and have everything they ever dreamed of so they can see it is not the answer.” -Jim Carrey In a recent ESPN article about Kyrie Irving leaving Cleveland, former teammate Channing Frye said “happiness comes and goes in the NBA.” Wait, what? These guys are playing the…

These Are the Goods

Articles Life doesn’t always give you exactly what you’re looking for at first glance By Ben Carlson U.S. companies have done even better than the U.S. economy in recent years. By Nir Kaissar It is difficult to foresee how one unlikely event can lead to other unlikely events until after they have occurred. By Nick Maggiulli Life…

Risk

In Berkshire’s 2017 annual letter, Buffett reviews details of “the bet” made ten years earlier with Protégé Partners, a fund of funds. The bet, which was made in the beginning of 2008, was very simple: could Protégé pick five fund of funds to beat the S&P 500 over the next decade? At the time the bet…

When Stocks and Bonds Fall

“The economy has changed and investors can no longer rely on a diversified stock-bond portfolio to provide protection in times of market volatility, according to JP Morgan Asset Management.” This comes from a recent Bloomberg article, A Diversified Portfolio May Not Help Investors Much This Year. We’re just two months into the year, but this observation is…

Changes

The past 12 months are a perfect sample to support Mandelbrot’s claim that “large changes tend to be followed by large changes, of either sign, and small changes tend to be followed by small changes.” Using rolling 30-day periods, from January 2017 through January 2018 there were 120 readings where the S&P 500 did not have…

Animal Spirits: Phony Happiness

On today’s show we talk about: How higher inflation is simultaneously good and bad for stocks. Why we love stories. The good and bad with private equity. Is there such a thing as a permanent portfolio? What Ben got from his MBA. Scary market predictions. Vanguard’s new factor funds. Links The new permanent portfolio From…

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…