Ben Carlson

Predictive vs. Diagnostic Frameworks

Philip Tetlock has spent his career studying experts and prediction. One of his studies involved nearly 300 economists, political scientists, intelligence analysts and journalists. They tallied almost 30,000 predictions in their respective fields. The average expert wasn’t much better than a random guess. And the more confident they were in their predictions the worst they…

Playing All The Hands You’re Dealt

Fargo is in the conversation for the best show on TV right now. I just finished up with the third season which, like the first two seasons, had a great combination of suspense, dark humor, crime, solid characters and a heavy dose of Minnesota accents. In one of the best scenes in the season finale…

Patience Exemplified

The technology bubble during the late-1990s will likely go down as one of the most difficult market environments ever for fundamental investors. Growth strategies absolutely crushed value strategies and anything invested outside of technology or internet companies appeared foolish. Warren Buffett’s Berkshire Hathaway stock was down nearly 20% in 1999 while the Nasdaq zoomed higher by…

How to Invest in an Overvalued Market

Investors have been warned about overvalued markets basically since the start of this stock market recovery. Some people are scared of above average valuations. Others simply choose to ignore them. And still others use them as scare tactics to sell financial product or newsletters. While you can’t control what the current market valuations are you…

Talking What Could Bring Down the Bull Market on WDYM

Predicting when a bull market will come to an end is a fool’s errand because no one can forecast with any certainty the timing of a shift in investor emotions or preferences. There have been hundreds of legitimate reasons given over the past few years for the reason the bull market is going to come…

Money Manager Cliches

I’ve spent a good chunk of my career looking at various funds, strategies, presentations, pitch books and sales pitches from money managers. While this experience has come from all sorts of different fund structures, asset classes and styles, there are many similarities between the narratives when you listen to enough of these pitches. Every firm, portfolio…

40 Under 40

The financial industry gets a bad rap. It seems very few people trust “Wall Street” anymore following the financial crisis. I get it. Much of it is deserved for greedy behavior and a lack of self-awareness about the treatment of clients. But many of the problems in the investment world stem from poorly aligned incentives…

When Knowledge is Useless

The average size of an NFL lineman in the 1960s was close to six feet tall and 250 pounds. Today the average NFL lineman is over six feet five inches and well over 310 pounds. There are likely a number of reasons for this huge increase over time — better workout programs, more informed diets…

14 Things the Market Does Not Care About

I wrote a piece for Bloomberg earlier this week about preparing in advance for the end of the bull market. I received an email from a reader who took umbrage with the fact that I said the bull market is now 8 years old. He made the case that the bull market didn’t really start…

How Markets Respond to Geopolitical Crises

Investors are increasingly worried about geopolitical crises but very few have taken the time to understand how the markets typically react when these things go down. The reactions to wars, political malfeasance, or scandals are not always what you would think based on the headlines. In this piece I wrote for Bloomberg I look back…