On this week’s Animal Spirits with Micahel & Ben we discuss: Michael’s new book (released today!): Big Mistakes: The Best Investors and Their Worst Investments Where Michael came up with the idea for his book and how it felt to write about his own mistakes Where the value and momentum premiums come from Why investing…
Is The Handmaid’s Tale Fast Approaching?
The latest fertility numbers in the U.S. make it appear as though the Handmaid’s Tale could be fast approaching (via the Wall Street Journal): American women are having children at the lowest rate on record, with the number of babies born in the U.S. last year dropping to a 30-year low, federal figures released Thursday showed. Some 3.85…
Does Private Equity Deserve More Scrutiny?
Institutional investors are going to have a difficult time hitting their return bogeys in the years ahead. Stock market valuations are well above long-term averages while interest rates are well below what fixed income investors are used to. This will make it exceedingly difficult for pensions to close their funding gaps or endowments and foundations…
Supply & Demand in the Stock Market
The number of stocks in the U.S. has more than halved since 1997, falling from roughly 7,000 to around 3,400. This chart from Dimensional Fund Advisors shows how the rest of the world has more than made up for this decline in U.S. names: Since 1997, stocks outside of the U.S. have doubled, from roughly…
Experience is Overrated
Charley Lau is widely respected in baseball circles as one of the greatest hitting coaches in the history of Major League Baseball. His book, The Art of Hitting .300, is regarded as one of the best instructional guides into the science behind a good swing. Here’s the problem — Lau never hit .300 in a single season…
Animal Spirits Episode 31: Stocks Are Not Bonds
On this week’s Animal Spirits with Michael & Ben we discuss: Stocks are not bonds, dividends are not written in stone. How we think about small cap stocks in a portfolio. Why you have to take historical market data with a grain of salt. Are the findings from the famous marshmallow experiment a myth? Why…
Double Digit Returns Are the Norm For the Stock Market
The S&P 500 is up a little less than 1% in 2018 (give or take where it closes today). There’s still a long way to go but if we were to end the year with a plus or minus low single-digit return that would be an outlier. Most years see the stock market give investors…
Playing in Traffic
At nearly every conference speech on behavioral psychology I’ve seen over the past decade or so the speaker will invariably ask the audience, “By a show of hands — how many of you think you’re an above average driver?” Of course around 90% of the hands in the room go up and the speaker will make…
Proof of Concept
The first ever full length animated feature movie was released in 1938. Snow White and the Seven Dwarfs quickly became the highest grossing sound movie of all-time. Even more impressive than the enduring quality of this movie (my 4-year-old loves it) is the new business it spawned for Disney. At the time, Disney wasn’t necessarily…
3 Misconceptions About Interest Rates
We’re finally in a rising interest rate environment (I think) after 10-12 years of predictions that rates had nowhere to go but up. Price drives narratives in the markets and the direction of interest rates is no different. Anything is possible but no one has a clue where rates are heading. I can’t predict where…
