There were a handful of investors who made a boatload of money betting against the housing market in 2007 by shorting subprime mortgages through the use of credit default swaps and such. John Paulson is the most notable, earning a $20 billion profit for his fund along with an estimated $4 billion for himself in…
It’s been almost a decade since The Big Short by Michael Lewis came out and I recently realized I’d forgotten too much of this wonderful book. So Michael and I decided to re-read this one and turn our discussion about it into a new podcast called Re-Kindled.1 We will be doing more of these in…
If you only followed the daily swings in the market it may not feel like stocks are going gangbusters in 2019. The average daily gain for the S&P 500 this year is up just 0.19% (the median is 0.14%). There have only been 9 daily gains in excess of 1% this year (with 3 down days…
The Price is Right was my first love when it came to game shows (I always wanted a Plinko board in my house). If you stayed home sick from school there was a good chance you’d be watching the Showcase Showdown. But the show was on during the day so I lost touch with Bob…
In the hierarchy of institutional investors, pension plans get picked on the most. Endowments and foundations are the mean girls of this space, generally looking down at their pension brethren because they all assume pensions are the last to the party when it comes to innovative investment ideas. In my experience, this is often unwarranted…
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: Tesla’s huge drawdown Why making your stock bets public makes it harder to have an open mind How our perceptions about retirement change over time Why…
We recorded an episode of Animal Spirits called The Bear Market on December 21, 2018 (it aired on December 26). The first 10 minutes or so of the podcast provides a look back into the psychology in the midst of a decent-sized downturn in the stock market.1 We talked about the damage that was inflicted…
In 1848, two young sisters in a small town in New York discovered they shared a room in their tiny farmhouse with a mysterious spirit. Margaret and Kate Fox learned of this spirit’s presence through a nightly knocking sound in the walls, floors, and furniture. To summon this mysterious spirit, Kate would knock on the…
Meet Sam. Sam’s entire family has terrible luck when it comes to the timing of their retirement. Sam’s great-grandparents retired at the end of 1928. Over the ensuing three years or so the stock market would drop close to 90% while the U.S. economy would contract nearly 30% in the Great Depression. In 1937, the…
The current retirement system leaves much to be desired. There are a decent number of people taking advantage of tax-deferred savings vehicles but it’s a fairly small number that ever reaches millionaire status in these accounts. In Fidelity’s defined contribution plan, there are roughly 157,000 people who have saved at least $1 million in their 401(k). There…
