Ben Carlson

How to Lie With Fed Statistics

“Averages and relationships and trends and graphs are not always what they seem. There may be more in them than meets the eye, and there may be a good deal less.” – Darrell Huff There was a study a number of years ago that split a number of people into two separate groups. One was…

Paul Tudor Jones & the Nature of the Beast

There are a lot of brilliant investors out there, but very few brilliant investors who are also brilliant communicators. It’s rare to find someone in the investment industry who has the ability to explain complex topics about the markets and investing in a way that a wide audience can understand. That’s why investors are constantly quoting…

Trading Big Mistakes for Little Mistakes

Last week the New York Times had a story about how everyone’s favorite punching bags, the millennials, aren’t using credit cards nearly as much as previous generations: Data from the Federal Reserve indicates that the percentage of Americans under 35 who hold credit card debt has fallen to its lowest level since 1989, when the…

How Volatility Can Work in Your Favor

In my last post I talked about how difficult it can be to invest in emerging markets because they are so volatile. Going back to the late-1980s, emerging markets have exhibited over 60% higher volatility in monthly returns than the S&P 500. Small cap stocks, as measured by the Russell 2000, have also shown more volatility…

Friday Mailbox

I get a steady stream of questions from readers in my inbox. I try to respond to as many as I can but thought it would be a good idea to start answering some of those questions here on the blog. I’ll try to do this once a month so feel free to email me…

How to Survive a Melt-Up

Ever since the financial crisis investors have been bombarded with books, blog posts, articles and advice about how to survive the next bear market/Lehman Brothers/black swan/recession/subprime/1987/big short moment in the markets. And don’t get me wrong, preparing yourself mentally for market downturns can be a helpful exercise. These things are inevitable so planning for a…

What It Takes to Retire Early

Lately I’ve been noticing an increasing number of stories about people who have managed to save a decent chunk of money in a relatively short period of time to be able to retire at a very young age. Here are a few I’ve seen recently along with some advice from each. This couple is retiring early…

Do Stocks Diversify Bonds?

Traditional portfolio management is based on the premise that you allocate to stocks for growth and bonds for stability. Bonds earn their place in a portfolio by providing valuable diversification benefits as they typically counteract stock market losses during bear markets. Bonds can act as both a source of dry powder when stocks are falling and…

Being Process-Oriented Means…

Thinking process over outcomes is one of those simple, yet difficult pieces of advice that is useful in many areas of your life. It’s difficult because we’re so obsessed keeping score and thinking in binary right or wrong terms. Since luck and randomness play such a large role in a complex world it’s more important…

How Progress Occurs

“If you can get good at destroying your own wrong ideas, that is a great gift.” – Charlie Munger Last year Michael Mauboussin and Dan Callahan from Credit Suisse performed an experiment to test how accurate people are at estimating their own abilities. They set up a trivia quiz of 30 true or false questions,…