On this week’s Animal Spirits with Michael & Ben we discuss: The lingering impact from the financial crisis on investor risk appetite. How a financial crisis in your formative years can leave lasting scars. Every generation has their own ‘Death of Equities.’ Even the Fed makes decisions based on pasts crises. Cliff Asness on how…
Wage Growth vs. The Stock Market
The unemployment rate has fallen off a cliff since reaching double digits in October of 2010. It now sits at just 3.9%. To put this in perspective, from 1970-1999, the unemployment rate never fell below 4%. Job openings in America now outstrip the total number of people actively seeking employment. Economic textbooks would tell us when demand exceeds supply…
The Other Failure Risk in VC
Venture capital is one of the most unique forms of investing in the asset management industry. The business model is predicated on the fact that the majority of the early-stage investments made by these funds will fail. In fact, multiple failures are expected. The hope is one big winner — a la Google, eBay, LinkedIn,…
Watch What People Do, Not What They Say
Conventional wisdom says you’ll need to replace roughly 70-80% of your income in retirement. These rules of thumb are always situation-dependent and rely heavily on a number of assumptions but this is the baseline most people set for themselves. However, most people only say this number because it’s conventional wisdom. When you dig a little…
Avoiding a Single Point of Financial Failure
In 1995, Pixar was on a rocket ship growth trajectory. Toy Story came out in November of that year to rave reviews and made more money than almost anyone thought was imaginable. It was the first full-length animated film done entirely using CGI and ended up grossing over $360 million worldwide. The team at Pixar…
Animal Spirits Episode 45: Do We Need a Recession?
On this week’s Animal Spirits with Michael & Ben we discuss: The financial independent, retire early movement. Does the 4% rule work if you retire in your 30s? Why you’re paying so little for all your new services Taking private jets for college tours. Is venture capital propping up a bunch of terrible business models?…
Is Real Estate a Non-Correlated Asset Class?
Investors have spent a lot of time and energy since the financial crisis in search of non-correlated assets. Most of their efforts have led to disappointing results, mainly because stocks are up huge since then but also because liquid alt and hedge fund strategies have left much to be desired in terms of performance. Real…
Revisiting The Melt-Up Scenario
Here’s a story about how difficult it is to predict markets in the short-term. Earlier this year I was working on a piece for Bloomberg. I started pulling on a string with an idea in early January. Stocks were already up 4-5% on the year and that’s following 2017 which saw returns in excess of…
Could Index Funds Become Too Popular?
A reader asks: But follow that thought through – there are any number of other clever investing ideas that seemed like a good idea, and failed once the secret got out. Isn’t indexing one of them? This question was in reference to the piece I wrote called The Half-Life of Investment Strategies that looked at how competition…
Your Biggest Expense as a New Parent
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,…
