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Howard Marks released his latest memo this week about focusing on what’s knowable and doing your best to ignore what’s not. Put simpler, stick with the things you can control and stop trying to predict future events. Everyone has an opinion on what happens next, but having an opinion and knowing are not the same thing.
Here’s Marks: Continue Reading…
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The idea of following sound principles is one of the main lessons in The Intelligent Investor. The other, of course, is the cycle of optimism and pessimism in the markets. The sound principles help to avoid mistakes and think independent of the crowd.
The cycle is what gets people into trouble. Those basic principles get tossed aside for what appears to be something better. But with markets, there’s always something better. The shiny object syndrome exists around returns. There is always something outperforming, which causes people to pile in, only to watch it lose – literally and figurative – to something else. Continue Reading…
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So thousands of published blog posts debating active versus passive and it turns out nobody was right (okay, maybe someone was right). That’s the latest from Michael Mauboussin’s “Looking for Easy Games”, on how the balance between active and passive impact each other. It’s your must read this week.
Mauboussin digs through the giant shift from active funds to passive funds over the past decade, its effect on markets, and, most important, how an investor subscribing to one (or the other) may benefit from an imbalance between the two. Continue Reading…
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The 2016 returns are in. The asset tables are updated.
I’ve explained this before here, here, here, and here, but I’ll do it again just in case. People use data to tell a story.
The simple story for these tables is diversification, allocation, and market cycles. It’s hard enough to pick the best performers every year, but even harder to do it while avoiding the worst ones, so we diversify across asset classes and geographies. When you take the good with the bad, you get a decent return over time. Decent may not be exciting or something to brag about at parties, but it gets the job done thanks to compounding. Really, that’s what you want. Exciting is for skydiving, not investing. Don’t get those confused. Continue Reading…
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Emerging markets have been cheap for a while now. Many people (including me) have pointed this out the past few years and not much has changed. My proclivity toward cheapness means I adjust my allocation towards it – moving some US to EM – and away from expensive equity assets based on valuation. That was three years ago.
This is the hard part of investing. Continue Reading…
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With the year almost over, now is a good time for a review. Every year I’m surprised when something I write gains traction. This year was no different. Sometimes I spend hours on an article that gets ignored while I spend minutes on what I assume is an afterthought and it gets a ton of hits. I stopped trying to figure it out long ago and just write about what I find interesting. You, the readers, do all the rest. Thank you!
I spent most of the year reading old books, articles, interviews, and lectures from some the most well-known investors around and then sharing some of their wisdom. There was a lot to take away for it. Continue Reading…