When I was in college, every spring a group of friends and I would go on a canoe trip on the Manistee River in the middle of nowhere in Northern Michigan. It was something of a last hurrah before school was out for the summer. During one of my final trips, after a long day…

It was the spring of 1976. Investors were still licking their wounds from the severe bear market of 1973-74. Donaldson, Lufkin & Jenrette, an investment bank, was hosting a conference that matched two investing legends onstage at the same time — Ben Graham and Charles Ellis. Ellis, moderating a Q&A, asked Graham why the mid-1970s…

“I’ve heard Warren say a half dozen times, ‘It’s not greed that drives the world, but envy.’” – Charlie Munger This experiment is fascinating: That little guy was perfectly happy doing his job and getting rewarded with cucumbers right up until the guy next door got a grape. This is one of my favorite experiments because…

Many investors have been operating under the assumption that we’re due for a market crash simply because stock returns have been so high over the past five years or so. The two large crashes we’ve experienced in this century alone have turned some forecasters into the financial prognosticator equivalent of Pavlov’s dogs.

Long-term government bonds have been on an absolute tear this year. The 20+ Year Treaury ETF (TLT) is up almost 20% on the year as interest rates have continued to drop.

“The way we traditionally conceive of ignorance—as an absence of knowledge—leads us to think of education as its natural antidote. But education can produce illusory confidence.” – David Dunning I have to imagine that having a behavioral bias named after your work is one of the highlights of the psychology profession (the Nobel prize isn’t…

The best thing I read this week comes from Bob Maynard, CIO of the $14.2 billion Idaho Public Pension Plan. Maynard’s entire approach is based on the premise that increased complexity is failing professional investors. Instead of fighting complex markets with complex strategies, Maynard favors a simpler approach, as he states in a write-up for…

Forbes has an excellent profile out on DoubleLine’s Jeffrey Gundlach. The entire piece is worth a read since Gundlach is not only one of the most respected investors out there today but he’s also very outspoken and entertaining. There was one part of the interview that I thought was interesting as it relates to the…

Last week I looked at some of the options available to bond investors in a low rate world. I showed that subsequent returns over the next decade tend to track the current interest rate level very closely. Here’s that graph again from the Wall Street Journal:

“We’ll begin with the obvious: about 80% of all mutual funds could shut their doors today and not be missed.” – David Snowball