Morningstar’s John Rekenthaler shared a wild statistic about Yale’s endowment fund in a piece published yesterday: The fund’s reputation, however, owes to its earlier accomplishments. In the 10 years from mid-2008 through mid-2018 (the latter being the date of the fund’s most recent report), Yale gained an annualized 7.4%. During that same time period, the…
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The Difference
My friends in New York love to point out there’s a difference between a slice of pizza in the Big Apple and a slice of pizza everywhere else in the world. I’ve always been of the opinion that pizza is almost always good no matter where it’s from but after sampling some pizza in New…
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). There…
Economic Growth Heading Into a Recession
A reader asks: I’ve heard ad nauseam that we are in the late innings of the expansion, but also that since we are at near 3% GDP, it is unlikely for us to quickly go into negative GDP growth and a recession. Would a certain level of GDP make it unlikely that a recession is…
How Often Is It a Stock-Picker’s Market?
One of the reasons it’s so difficult to outperform the market is because so many individual stocks themselves underperform the market. It’s not a symmetrical distribution where half the stocks outperform and half underperform. A few years ago Michael Cembalest at JP Morgan performed an extensive study on the Russell 3000 Index, which is a good…
Why Are People Miserable at Work?
Small talk has never been my thing. When you meet someone new I’d estimate 90% of conversations begin with the following question: “So what do you do?” Very few people care about the answer but this has turned into a cultural norm in recent decades. Work is ingrained in our identities in many ways. Derek…
How to Wreck a Pension Plan in 3 Easy Steps
It’s hard to find many investment books since the turn of the century that don’t include the research paper from Roger Ibbotson and Paul Kaplan called Does Asset Allocation Explain 40, 90, or 100 Percent of Performance?1 The study was meant to decipher whether it was asset allocation or market timing and security selection that…
Simple vs. Complex, 2018 Edition
Jason Zweig recently chatted with the ever-candid Charlie Munger, who had this to say of value investors: The money managers among them are “like a bunch of cod fishermen after all the cod’s been overfished,” Mr. Munger tells me. “They don’t catch a lot of cod, but they keep on fishing in the same waters. That’s…
Martin Short’s Nine Categories for Self Evaluation
Martin Short has had a sneaky good career in Hollywood going on four decades or so. He was on Saturday Night Live for just one season in the mid-1980s but that led to movies like Three Amigos, Innerspace, Three Fugitives (underrated if memory serves), Father of the Bride, Captain Ron (loved this one) and many…
How To Stay in the Game
Everyone remembers game one of last year’s NBA Finals between Golden State and Cleveland as the JR Smith game. After rebounding a missed free throw with just under 5 seconds left Smith dribbled out the clock, not realizing the Cavs weren’t winning but rather tied with the Warriors. This picture of LeBron’s dismay with Smith…
