The asset class, sector, international, and emerging markets quilts are up-to-date for the first quarter of 2025. You can find interactive versions of each here:

• Asset Class Returns
• Sector Returns
• International Market Returns
• Emerging Market Returns

You can also download copies here or grab the images below.

I’ll have a deeper dive into the data next week. So far, the lesson this year is diversification. You can see this within indexes, like the S&P 500, or in a more broad portfolio allocation.

For example, the S&P 500 lost 4.6% in the first three months (4.3% when you include dividends). Only 39% of the S&P’s component stocks performed worse than the index. 46% had a positive return through March.

The Mag 7, the biggest companies in the index — all tech and praised last year — collectively averaged an 18.4% loss (ranging from -1.6% to -35.8%) and led the decline in the Info Tech and Communication Services sectors. While Energy, Consumer Staples, Utilities, Real Estate, Financials. and Materials sectors were positive. Consumer Discretionary was the other standout loser.

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Quote for the Week

Investment based on genuine long-term expectation is so difficult to-day as to be scarcely practicable. He who attempts it must surely lead much more laborious days and run greater risks than he who tries to guess better than the crowd how the crowd will behave; and, given equal intelligence, he may make more disastrous mistakes. There is no clear evidence from experience that the investment policy which is socially advantageous coincides with that which is most profitable. It needs more intelligence to defeat the forces of time and our ignorance of the future than to beat the gun. Moreover, life is not long enough; — human nature desires quick results, there is a peculiar zest in making money quickly, and remoter gains are discounted by the average man at a very high rate. The game of professional investment is intolerably boring and over exacting to anyone who is entirely exempt from the gambling instinct; whilst he who has it must pay to this propensity the appropriate toll. Furthermore, an investor who proposes to ignore near-term market fluctuations needs greater resources for safety and must not operate on so large a scale, if at all, with borrowed money— a further reason for the higher return from the pastime to a given stock of intelligence and resources. Finally it is the long-term investor, he who most promotes the public interest, who will in practice come in for most criticism, wherever investment funds are managed by committees or boards or banks. For it is in the essence of his behaviour that he should be eccentric, unconventional and rash in the eyes of average opinion. If he is successful, that will only confirm the general belief in his rashness; and if in the short run he is unsuccessful, which is very likely, he will not receive much mercy. Worldly wisdom teaches that it is better for reputation to fail conventionally than to succeed unconventionally. — John Maynard Keynes (source)

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Here’s what I’ve been reading for the past three months:

• The Art of Worldly Wisdom — Baltsar Gracian was a Spanish priest and philospher in the early 1600s who understood human nature better than most. His Worldy Wisdom offers 300 maxims on fame, fortune, luck, reputation, wisdom, and more. It can be read in bite-sized pieces. (Notes)
• The Lords of Creation — Tells the history of business and finance from the late 1800s to the depths of the Great Depression. You get stories like the creation of U.S. Steel, the fight over the Union Pacific, and the attempt to corner United Copper. It’s a history of power, greed, concentrated wealth, willful irresponsibility, and financial crises. Notes to come.
• The Usefulness of Useless Knowledge – The book contains Abraham Flexner’s timeless essay of the same name and an introduction to the piece. Flexner warns of attempts to control and mold science rather than going wherever curiosity leads. Many discoveries and inventions are the byproduct of what Flexner called “useless knowledge” gained from chasing curiosity. It’s a timely piece. Flexner’s essay can also be found via Google.
• Innumeracy: Mathematical Illiteracy and Its Consequences — A fun little book for anyone who likes numbers, or is curious about stories with numbers, and why we are horrible at comprehending big numbers, small numbers, fractions, probabilities, and more. The consequences: we misjudge risk, believe claims easily refuted, and just make poor decisions. It’s similar to Darrell Huffs, How to Lie with Statistics. Notes to come.

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Quote for the Week

Graham was concerned with limiting his risk and he didn’t want to lose money. People don’t remember what happened before and how things were. And that’s one of the mistakes people make in investing as well.

In the last 15 years, it’s been a remarkable stock market. But people forget what things were like during the 1930s. I think Graham – because he lived through that period – remembered it, was scared it would happen again and did everything he could to avoid it.

But in the process of avoiding it, he missed a lot of opportunities. That’s one of the problems you always have — you don’t really lose, but you don’t really make, either. I believe you should remember what took place — even if you weren’t around at the time. One of the problems of a lot of the people who went through the Depression — Ben Graham, Jerry Newman and others — is that they keep on thinking that things will always be like that.

Even Graham used to say — and quite correctly — that you can’t run your investments as if a repeat of 1932 is around the corner. We can have a recession and things can get bad. But you can’t plan on that happening. People who did missed this tremendous market. — Walter Schloss (source)

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Electricity was a fledging industry in the 1890s. Samuel Insull was at the center of its transformation and growth.

Samuel Insull got his start as a stenographer in London. After losing his job, he found an opening at Thomas Edison’s new telephone company, applied, and was hired as the bookkeeper and secretary for the London manager.

As fate would have it, a job opening in America changed everything. Edison needed a personal secretary. Insull made his interest known. At age 21 (1881), he was off to the U.S. to work alongside the great inventor. Edison recognized Insull’s potential and he quickly moved up the ranks.

Within 11 years, he was offered a vice-president position in Edison’s General Electric Company. Insull, unhappy with the offer (he expected a higher position), took charge of Chicago Edison Company instead in 1892.

Insull believed that mass production and scale was the future of the electric utility industry. The efficiencies that came with size lowered costs, lowered rates for customers, and boosted profits for shareholders. It was a win-win all around. But that meant Insull needed to monopolize Chicago’s electric grid.

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Quote for the Week

People spend all this time trying to figure out “What time of the year should I make an investment? When should I invest?” And it’s such a waste of time. It’s so futile. I did a great study, it’s an amazing exercise. In the 30 years, 1965 to 1995, if you had invested a thousand dollars, you had incredible good luck, you invested at the low of the year, you picked the low day of the year, you put your thousand dollars in, your return would have been 11.7 compounded. Now some poor unlucky soul, the Jackie Gleason of the world, put in the high of the year. He or she picked the high of the year, put their thousand dollars in at the peak every single time, miserable record, 30 years in a row, picked the high of the year. Their return was 10.6. That’s the only difference between the high of the year and the low of the year. Some other person put in the first day of the year, their return was 11.0. I mean the odds of that are very little, but people spend an unbelievable amount of mental energy trying to pick what the market’s going to do, what time of the year to buy it. It’s just not worth it…

They should buy, hold, and when the market goes down, add to it. Every time the market goes down 10 percent, you add to it, you’d be much — you would have better return than the average of 11 percent, if you believe in it, if it’s money you’re not worried about. — Peter Lynch (source)

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