There are no can’t-miss-works-every-time signals in the stock market or the economy. It’s never quite that easy. But inverted yield curves have been a fairly reliable indicator in the past in terms of danger ahead for stocks and the economy. I did a deep dive on what this could mean based on historical observations in…
Animal Spirits Episode 15: The Noobwhale
On this week’s Animal Spirits with Michael and Ben we discuss: Why the crazy volatility in stocks shouldn’t be that surprising. The hidden risks in alternative investments. Why private equity is riskier now than it was in the past. Does it make sense for financial advisors to play the money managers selection game? Is picking…
It’s Not Too Late
Stocks have gotten hammered over the past 10 days or so, culminating in that 4% woosh down yesterday. These things happen but it’s never easy to deal with from a psychological perspective. Stocks were getting hammered again in overnight futures but as I type this they’re up down up down all over the place. When…
The Expectations Game
In the latest episode of our podcast, Michael and I discussed the relationship between corporate earnings and stock market performance. I’ve done some work on this in the past so I went through and updated my data on earnings growth versus stock market returns by decade: It may also be helpful to view these numbers…
The Vanguard Endowment Model?
Useful benchmarking is one of the hardest things to do for institutional investors because of the way they structure their portfolios. Take a look latest asset allocations for college endowment funds from the annual study done by the National Association of College University Business Officers (NACUBO): Alternative investments are now the biggest allocation for all…
When Mental Models Fail
Lynn Hill is a world-renowned rock climber. Widely regarded as one of the sport’s best climbers in the 80s and 90s, she won more than 30 international climbing titles. In the summer of 1989, she was about to climb what she termed a “relatively easy” route in France. At the base of a cliff she…
Animal Spirits Episode 14: Cash on the Sidelines
On this week’s Animal Spirits with Michael & Ben we discuss: My recent trip to Disney. Has the Fed been punishing savers through low interest rate policies? What’s a retiree to do when yields are so low? Is there a fair valuation for the stock market? Has it changed over time? Are investors holding too…
What To Do When Your Stocks Are Soaring?
Bull markets seem like they should be easier than the alternative but even dealing with gains can be challenging as an investor. Research shows that investors trade more often during bull markets because we don’t know what to do with gains, it’s difficult to hold winners, and there are constant temptations with even bigger winners…
All-Time Highs, Risk & Consequences
In my first book I went through 14 market myths using history as a guide. Myth #9 was that all-time highs in the stock market mean it’s going to crash. I shared the following: The S&P 500 hit new all-time highs in early 2000 and subsequently crashed by more than 50 percent over the following…
Some Lessons For Living From Older Generations
The Guardian recently ran a piece written by 94-year-old Harry Smith. Smith waxed poetic on his description of what growing old has meant to him: People should not look at their approaching golden years with dread or apprehension but as perhaps one of the most significant stages in their development as a human being, even…
