Here’s something no one really prepared me for when I became a parent: Kathleen and husband Dustin Farhat pay $464 per week for childcare for 5-month-old son Brady and 3-year-old Jack while the couple works full-time jobs. That’s $1,856 a month, about $500 more per month than their mortgage payment on their home in Bath,…
Animal Spirits Episode 44: When Hitler Took Cocaine
On this week’s Animal Spirits with Michael & Ben we discuss: How much brokers charged in the 1940s for stock trades. Stocks are overvalued by almost every measure but what does that mean? How the growth of intangible assets has impacted the markets. The fallout from the crypto massacre. Will the finance industry stamp out…
Why Doesn’t The Stock Market Care About the News?
The S&P 500 is up almost 10% this year. Small cap stocks are up more than 13%. Mid caps have risen just shy of 9%. The Nasdaq 100 is up almost 19%. The S&P or the Nasdaq haven’t had a down year since 2008. The Teflon market has deflected everything that’s been thrown its way, as this chart from…
10 Things You May Not Know About the Great Depression
The Great Financial Crisis was the worst economic and market meltdown we’ve experienced in a generation. But compared to the Great Depression, it was a walk in the park. Here’s the breakdown: In 1938, six years after the end of the Great Depression, the unemployment rate was still as high as 20%. Six years after…
The First Modern Investing Advertisement
On a recent episode of the Odd Lots podcast, Tracy Alloway sat down with her Bloomberg colleague Eric Weiner to discuss the history of Wall Street. They tell the story of Louis Engel, an executive for Merrill Lynch who created the first modern advertisement for an investment firm in 1948. Following the Great Depression, most…
Buying Emerging Markets During a Disaster
Earlier this week I wrote a short history (because there really is no long history) of corrections and bear markets in emerging market stocks. Here’s the graph for those of you who missed it: The natural follow-up, which is a question many of my astute readers posed, is what happened to the performance of EM…
Animal Spirits Episode 43: Why Andy Dufresne Would Make a Good Money Manager
On this week’s Animal Spirits with Michael & Ben, we welcomed Morgan Housel back to the show. The three of us discussed: Elon Musk’s bizarre tweet about taking his company private. What odds we all place on TSLA actually going private with funding secured. The shrinking U.S. stock market. Is venture capital in a bubble? Why…
Expected Returns & The 7 Year Itch
GMO’s latest 7-year asset class return forecast leaves much to be desired: These forecasts are made on a real basis so they take inflation into account here but however you slice it, this is not a great look for expected returns. Obviously, expectations and reality don’t always sync up at an agreed upon equilibrium. GMO…
A Short History of Emerging Market Corrections & Bear Markets
Emerging market stocks as a group are dangerously close to the accepted definition of a bear market. Since peaking in late-January earlier this year, the MSCI Emerging Markets Index is now down 19.65% (not including dividends). It’s down around 10% on the year. If history is any guide, the stocks of these developing nations will…
The Art of Self-Control
I read a few things this week that had to do with control in some form or another that are worth highlighting. A study released earlier this year found people who have high self-control tend to experience less of those things that cause impulsive behavior such as fatigue, hunger, and stress: We found that trait…
