Ten Reasons Finance Will Keep Changing Constant flux is the norm. Get used to it. Bloomberg, June 22, 2018 I spoke at the Vanguard Connect event yesterday, and during the Q&A got a very interesting question: “What do you think the financial services industry will look like in 5 or 10 years?” I… Read More The post Bloomberg: Ten Reasons Finance Will Keep Changing appeared first on The Big Picture.
How to Avoid Getting Sick From Financial Markets Start with understanding what can, and cannot, be controlled. Bloomberg, June 20, 2018 Major stock indexes have given up much of their year-to-date gains after the past several days of selling. The year is days away from being half over, and the Standard & Poor’s… Read More The post Market Crashes are bad for your health appeared first on The Big Picture.
Why to Keep Your Inflation Anxiety in Check Yes, prices are rising faster, but all signs suggest it won’t amount to much. Bloomberg, June 18, 2018 For those feeling the vague pangs of inflation anxiety — nothing special, just the plain-old-run-of-the-mill cost of living price increases — this one is for you. This… Read More The post Why Inflation Is Not a Problem (Yet) appeared first on The Big Picture.
Why Wall Street Isn’t Freaking About Trump Tariffs, trade wars! So what? This is what he promised as a candidate. Bloomberg, June 13, 2018, Massive tariffs in new trade war! Ho hum. G7 Western Alliance Breaks Down! Yawn. Rifts Increase Possibility of Global Recession! Bor-ing. Ominous headlines have dominated the news since… Read More The post Trade wars, Dysfunctional Behavior, Tweets, Oh My! appeared first on The Big Picture.
Ranking What Helps or Hurts Investment Returns …. Bloomberg, June 11. 2018 What drives the returns of any portfolio? Specifically, from the moment someone starts saving for retirement, until the day they begin to take their required minimum distribution at age 70½, what are the factors[i] that determine just how successful that portfolio… Read More The post Hierarchy of Portfolio Success appeared first on The Big Picture.
Smart Beta Performance Isn’t Worth the Cost The higher fees offset sporadically better returns. Bloomberg, June 8, 2018 Last summer, we looked at fundamental indexing, which is perhaps better known by the catchy marketing phrase “smart beta.”1 The practice uses metrics such as book value, earnings and dividend yield to assemble investment portfolios,… Read More The post Is Smart Beta Having Performance Issues? appeared first on The Big Picture.
Most of Us Really Are Not Fabulously Rich The notion that government statistics vastly understate personal wealth is absurd. Bloomberg, June 4, 2018 The first time you see a dubious economic claim, you may not take much note of it. The second time, your neck hairs should stand on end. The third… Read More The post No, Your iPhone Does Not Make You Wealthy appeared first on The Big Picture.
Hedge Funds Bear the Blame for Looking Bad They compared themselves to the S&P 500, then complained when they underperformed. Bloomberg, June 1 2018 A couple of weeks ago, Barron’s interviewed mutual fund legend Jack Bogle, the inventor of the index fund and founder of Vanguard Group. One intriguing exchange caught my eye:… Read More The post Love the Player, Hate the Game appeared first on The Big Picture.
Theranos’ Fatal Flaws Were in Plain Sight With this many red flags, it’s a wonder the collapse didn’t come sooner. Bloomberg, May 30, 2018. Last week, I previewed 10 books I want to tackle during the summer reading season. I finished the first one, “Bad Blood: Secrets and Lies in a Silicon Valley… Read More The post The Bad Blood at Theranos appeared first on The Big Picture.
Never Mind the Millionaires. Here’s Advice From Billionaires. The richest offer life lessons about how they got where they are. Bloomberg, May 25, 2018 Last month, I described an email that promised vast riches if I would adopt “The Millionaire Mindset.” This is the sort of silly wishful thinking I hate:… Read More The post Ignore the Millionaire Mindset; Try the Billionaire Behavior Set Instead appeared first on The Big Picture.
How Public Pensions Can Start Healing Themselves A series of questions and answers can help. Bloomberg, May 21, 2018 Our discussion last week about representatives of the League of California Cities urging the CalPERS, the state’s huge pension fund for public employees, to juice up investment returns generated a lot of interesting feedback.… Read More The post Advice for Pension Funds and Endowments appeared first on The Big Picture.
The Markets Don’t Care About Your Wants or Needs Thinking outside the box probably is a mistake. Bloomberg, May 18, 2018 You may have reasonable expectations of what you can expect from your investments during the coming years and decades. But regardless of what your risk-adjusted return expectations are, the first rule of economics… Read More The post Mr. Market is “Your Needs” Agnostic appeared first on The Big Picture.
There’s a Right Way and a Wrong Way to Fail The options are: openly examine past mistakes and learn or avoid a reckoning and repeat them. Bloomberg, May 16, 2018 I have been thinking about errors, mistakes and failures ever since I traded my first stock decades ago. Good traders expect to be… Read More The post We Should Fail Better appeared first on The Big Picture.
A Tweetstorm That Every Investor Should Read A Wall Street veteran makes the case for acknowledging our ignorance. Bloomberg, May 11, 2018 Yesterday, James O’Shaughnessy posted a long and intriguing tweetstorm about investor ignorance. O’Shaughnessy is the chairman and founder of O’Shaughnessy Asset Management LLC, and the author of the classic investing book… Read More The post Do you know what you don’t know? appeared first on The Big Picture.
A Hedge-Fund Fee Plan That Only Charges for Alpha The industry had been paid a fortune for underperformance. That’s changing. Bloomberg, May 9, 2018 One of my biggest criticisms of the hedge-fund industry has been the mismatch between fund performance and management fees. A traditional fee structure of “2 and 20” (a 2… Read More The post Paying Alpha Prices for Beta appeared first on The Big Picture.
Locals Fill Infrastructure Void Left by the Feds States and cities are improving rail lines, airports and electrical grids. Bloomberg, May 7, 2018 I have been discussing the sorry state of American infrastructure for years. My personal experience is that the U.S.’s infrastructure is bad, New York State’s is worse and New York City’s is… Read More The post My Personal Infrastructure is Getting Better appeared first on The Big Picture.
Taxi Cab Owners and Regulators Created Uber The number of cars for hire didn’t rise with demand. What would you expect? Bloomberg, May 4, 2018 On this day May 4, 2011, Uber NYC launched. It filled an enormous, artificial void that was created by the Taxi and Limousine Commission at the behest of… Read More The post How the TLC & Medallion Owners Created Uber appeared first on The Big Picture.
A Billionaire Makes a Classic Investing Error Concentrating in a single asset class can be an invitation to trouble. Bloomberg, May 3, 2018 I try to avoid giving unsolicited advice to billionaires. They are doing just fine without me. Besides, nobody likes to hear from the cheap seats, especially when they just made… Read More The post Don’t Put Half of Your Net Worth Into Anything appeared first on The Big Picture.
Brexit Failure Looks More Likely Every Day Too many things are lining up against the U.K. leaving the EU. Bloomberg, April 27, 2018 Today, I will violate one of my favorite principles, and hereby make this prediction: No Brexit! In other words, the U.K. will not exit the European Union. By 2023, we will… Read More The post No Brexit appeared first on The Big Picture.
Boy, that escalated quickly. Much of what I write in these pages generates pushback – active vs passive, hedge fund performance and costs, folly of forecasts, etc. – but none pushes peoples’ button’s quite like challenging their favorite self-help gurus[i] and their aphorisms. I am oblivious to social cues, and the response to A Millionaire… Read More The post Don’t Think like A Millionaire, Act Like A Billionaire appeared first on The Big Picture.