Charley Ellis is one of my favorite people in the investment business. He seems to always have a similar message but I still come back to that message over and over again because of the way he delivers it. Ellis recently sat down for another chat with Ted Seides on the Capital Allocators podcast. He…
Mean Reversion & The Placebo Effect
A podcast listener asks: It is my understanding that financial theory proposes that asset prices revert to their long-term mean. If so, does this conjecture apply to interest rates too? Mean reversion is probably one of the most misunderstood concepts in all of finance. On the one hand, it’s misunderstood by performance chasers who don’t…
Updating Some Performance Charts & What I’ve Been Reading Lately
A reader asked this week if I would update an old performance chart of the S&P 500 I used a few years ago. Here are the S&P 500 calendar year returns shown as a scatter plot: The red line is the average so you can see how wide the fluctuations are from year to year….
10 Money Revelations From Being a Parent
Here are some of the realizations I’ve had about finances from being a parent: 1. Yes, kids are expensive but… The personal finance section of any financial publication will be quick to remind you that raising a child can cost upwards of $250,000 from birth through age 18. When you include the obscene cost of daycare…
Animal Spirits Episode 39: The Worst 401(k) Advice
On this week’s Animal Spirits with Michael & Ben we discuss: The pie chart heard round the world. Why Michael didn’t create a chart crime. Why concentrated gains are the norm in the stock market. How difficult is it to save $1 million in a 401(k)? The worst advice we’ve seen on 401(k)s. Is AQR the…
There’s No Such Thing as Mosquito Week
This week marks the 31st rendition of the series that’s now the longest-running cable TV event in history which has been viewed by millions of people all around the globe. Shark Week first appeared all the way back in 1988. The series was originally about promoting the conservation of these animals and clearing up any…
How Hard is it to Become a 401(k) Millionaire?
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)….
Arguing With the Yield Curve
We touched on the yield curve on this week’s Animal Spirits because it seems to be the main point of contention in the markets right now. It’s all any of us market nerds can talk about, partly because the markets are somewhat boring this year and partly because investors love to try their hand at predicting…
Surrendering to the Charms of Magical Thinking
The World’s Fair took place in Chicago in 1893. It occurred during one of the worst economic panics of that century when economic activity fell almost 40% in a little less than two years from the combination of railroad bankruptcies, a run on the gold supply, and a banking collapse. But the economic backdrop didn’t…
Animal Spirits Episode 38: Half the Population
On this week’s Animal Spirits with Michael & Ben we discuss: The recession signal everyone is talking about. Is the historical playbook for an inverted yield curve too easy? The case for investing in bonds. How many Americans have an emergency savings account? Will half the population live in just 8 states in 20 years?…
