Ben Carlson

Diversification Is No Fun

The Wall Street Journal had a story yesterday that highlights the dominance of U.S. stocks over the rest of the world in the past few years: Since 2012 alone, the U.S. share of global stock market capitalization has risen from roughly 35% to just over 40% of the total. I tweeted out the following this morning, which…

Know Your Audience

AQR is arguably one of the top fund firms in the world right now. They manage over $170 billion in a wide variety of quantitative investment strategies. They are able to marry financial research with real-world investible strategies as good as anyone in the marketplace. While they began as a hedge fund firm that catered…

Everyone is in Sales

In a recent post I quoted Warren Buffett who said, “The most important skill in finance is salesmanship.” I said that I completely agreed with this statement, but it took me a while to come to this understanding. A few people asked so I decided to expand on these thoughts. I always used to assume that sales were…

The Agony of Investing in Small Cap Stocks

Last week my colleague Michael Batnick pointed out that small cap stocks have seen the equivalent of both a bear and bull market this year alone: The people that use all-time highs to scare you are the same people who told you that the 27% selloff in the Russell 2000 earlier this year was the…

Something I’m Worried About

Predicting crashes, recessions, black swans and such has become fetishized by many in the investment world since the Great Financial Crisis. Those who predicted trouble prior to 2008 have had a hard time letting go of that one right call and plenty of those who missed it have been trying to make up for lost…

The Hidden Variable of Investment Performance

At our conference last week I moderated a panel on the topic of organizational alpha. This is the idea that adding value to an investment portfolio goes far beyond trying to outperform the market. Traditional alpha is a finite resource and can be fleeting. Organizational alpha is something that every individual or firm can adopt to…

Taxes & Timing

I spend a ton of time reading and most of it ends up falling in the interesting, but not very useful category. And that’s okay — not everything you read is going to be groundbreaking. This week I did come across two research pieces that I thought were very useful and wanted to share some…

Don’t Try to Get Rich Twice

Warren Buffett recently spent some time giving a talk to a group of MBA students at the University of Maryland and was asked what the most important skill in finance is. This was his response: The most important skill in finance is salesmanship. That’s how you convince someone to marry you and that’s how you get…

How Bad Could Bond Market Losses Get?

Financial advisor Ric Edelman gave Howard Gold at MarketWatch some pretty sobering thoughts on the bond market this past week: “The typical investor today has never experienced a sustained rising-rate environment and they are emotionally and historically unprepared for what happens when interest rates go up 3% or 5%,” he said in a telephone interview…

The Limitations of Algorithms

It would be an understatement to say that the election result caught some people off-guard (just not Dave Chappelle or Chris Rock). When these things happen, rational people try to learn from their mistakes by showing some humility. Political discussions are rarely rational, though, so the past week or so has been filled with hindsight bias,…