This week’s Animal Spirits with Michael & Ben is sponsored by YCharts: Mention Animal Spirits and receive 20% off your subscription price when you initially sign up for the service. We discuss: The dreaded yield curve inversion — useful signal or noise? Who’s smarter — the bond market or the Fed? Which generation is in more trouble financially…
Economic Growth Heading Into a Recession
A reader asks: I’ve heard ad nauseam that we are in the late innings of the expansion, but also that since we are at near 3% GDP, it is unlikely for us to quickly go into negative GDP growth and a recession. Would a certain level of GDP make it unlikely that a recession is…
Talk Your Book: Creating a Buffer
Today’s Animal Spirits: Talk Your Book is presented by Innovator ETFs: We discuss: Surviving the upside when trying to hedge the downside The ideal client for a hedging strategy Using options to provide a buffer on the downside and capping the upside Why the payouts of a structured product are typically more appealing than the…
How Often Is It a Stock-Picker’s Market?
One of the reasons it’s so difficult to outperform the market is because so many individual stocks themselves underperform the market. It’s not a symmetrical distribution where half the stocks outperform and half underperform. A few years ago Michael Cembalest at JP Morgan performed an extensive study on the Russell 3000 Index, which is a good…
Why Are IPOs Oversubscribed?
Levi Strauss created the first pair1 of blue jeans in 1873. He went to San Francisco to make his money in the gold rush but found more success using denim and rivets to make pants that would last longer. They were actually called waist overalls until 1960 when baby boomers began calling them jeans. In…
Competing Takes
In the wake of the recent college admissions bribery scandal that ensnared Aunt Becky and a whole host of other wealthy people, there were generally two takes from the content/social media apparatus: (1) College is a meritocracy that benefits the rich. It shouldn’t come as a shock to anyone that rich people pull strings to get…
Animal Spirits Episode 73: The Expectations Gap
This week’s Animal Spirits with Michael & Ben is sponsored by YCharts: Mention Animal Spirits and receive 20% off your subscription price when you initially sign up for the service. We discuss: What Congress doesn’t understand about financial services. The college admissions bribery scandal. Does it matter where you went to college? Can tech companies solve higher education?…
The Market Won’t Provide High Returns Just Because You Need Them
The late-Peter Bernstein once wrote, “The market’s not a very accommodating machine; it won’t provide high returns just because you need them.” When you do need higher investment returns because of a perceived shortfall in assets for a specific goal you generally have 3 options to remedy the situation: (1) Adjust your expectations, and therefore,…
Talk Your Book: The Low Volatility Anomaly
Today’s Animal Spirits: Talk Your Book is presented by Invesco: We discuss: What is the low volatility anomaly? Why financial theory doesn’t always translate into the real world The three behavioral and structural reasons for the low vol anomaly How often do different factors overlap with one another? How the market environment impacts low vol…
Will the U.S. Continue to Dominate?
Elroy Dimson, Paul Marsh, and Mike Staunton have been publishing the following chart in their annual update for some time now and every single year it blows me away: The U.S. market share looks like Pac Man preparing to eat the rest of the world. Michael and I discussed some of the reasons for the U.S. dominance…
