Quote for the Week
People want to buy today what they should have bought 5 or 6 years ago; call it the 5 year psychological cycle.
Today people want commodities, emerging market, non U.S. assets, and small and mid-cap stocks. Those were all cheap 5 years ago and had you bought them then you would be sitting on enormous gains. But 5 or 6 years ago, everyone wanted tech and internet and telecom stocks, and venture capital and U.S. mega caps. The time to buy them was in 1994 or 1995, when they were cheap.
But in 1994 or 1995, people wanted banks and small and mid caps, which should have been bought in 1990, and well, you get the picture.
In general, you can get a good sense of what to buy now by looking to see what the worst performing assets or groups were over the past five or six years. That is long term for most people, and long enough to convince them that the malaise is permanent and to have migrated their money elsewhere, such as to whatever has done best in the past 5 or 6 years. — Bill Miller, 2006 (source)
From the Archives
Last Call
- The Cost of Comfort – T. Lamade
- Thinking in the Age of the Everything Bubble – F. Martin
- Why Do Desired Stock Allocations Differ from Actual Holdings? – CRR
- Life Isn’t a Spreadsheet – Spilled Coffee
- Your Only Retirement Constant Will Be Change – Best Interest
- Perfectionism, Portfolios, and Schmitts Gay Beer – Falling Knife
- Ford and the Birth of the Model T – Construction Physics
- The Dilemma That Brought Down Kodak – Quartr
- On Accidental Design, Incessant Chewing, and the Brilliance of the VW Axle Stop – Why is This Interesting?
- Going Viral: How Ideas, Beliefs, and Innovations Spread in the Digital Age – Santa Fe Institute