Most Recent Stingy News
|
|
Don't freak out |
02/10/25 2:32 PM EST | Behaviour |
"If social media sentiment translated into market moves we would have seen a 1987-like crash on Monday. You had crypto prices crashing, equity futures falling, currencies moving and tons of speculation on what it all means. I don't know what it all means. No one does because we have no idea how long these tariffs will last or how punitive they will be. Investing would be a lot easier if there were no uncertainty." |
More Behaviour: Taking it personally |
The inflation gamble |
|
Bubbles might be likely to repeat today |
02/10/25 2:17 PM EST | Markets |
"Bubbles do sometimes repeat within the span of a few years. Historically, the Mississippi Bubble in France ended around 1720 just as the South Sea Bubble appeared in Britain. And in the past few decades we've often see blatant overpricing that appears, gets corrected, and then promptly re-appears. In the lab, we can observe bubbles that occur in repeated experiments run with the same participants. All these facts are consistent with theoretical models that can produce recurring waves of bubbles." |
More Markets: The hidden costs of volatility drag |
AI and the Mag 7 |
|
Taking it personally |
02/10/25 2:16 PM EST | Behaviour |
"Today's discussions of risk are more nuanced, reflecting an awareness that the danger from misfortune is matched by the damage that can be done by our own behavior. Consider the typical stock-market cycle. Thanks to research by behavioral-finance experts, we now have a pretty good idea of how investors' thinking changes along with the market." |
More Behaviour: The inflation gamble |
Taking center stage |
|
The hidden costs of volatility drag |
02/10/25 2:02 PM EST | Markets |
"Leveraged concentrated or non-diversified ETFs can be useful for short-term trading, but they are generally ill-suited for long-term investing. Their underperformance is primarily due to volatility drag - a natural result of compounding returns in volatile markets. This issue is amplified when leveraging highly volatile assets, as the drag increases disproportionately with higher leverage." |
More Markets: AI and the Mag 7 |
The fartcoin stage of the market |
|
AI and the Mag 7 |
02/10/25 1:57 PM EST | Markets |
"a lot of investors have done very poorly betting against the scrappy innovators of Silicon Valley. But now that they are mega-cap behemoths run by mega-billionaires trying to outspend each other, maybe the Mag 7 will be outmaneuvered by their true heirs, another group of as-yet-unknown young innovators who are toiling away all over the world in garages far less expensive than the $1,700/square foot you have to pay to live in the cushy confines of Silicon Valley." |
More Markets: The fartcoin stage of the market |
There is no fear priced into anything |
|
When are tariffs good? |
02/10/25 1:37 PM EST | World |
"Tariffs help domestic manufacturers by protecting them from foreign competition, but they hurt them by driving up the cost of their imported components. This is one of the two big problems with tariffs - the other one being that they drive up consumer prices.But does this mean tariffs are always bad?" |
More World: Tariffs on Canada and Mexico are bad news |
Trump gone soft |
|
U.S. floats idea of defaulting on treasuries |
02/10/25 1:33 PM EST | Bonds |
"imagine thinking that by downloading a ton of data and having a few days to analyze it you could make the determination that a significant amount of the U.S. national debt wasn't real and didn't have to be paid." |
More Bonds: Remember the global financial crisis |
Shorting credit |
|
Tariffs on Canada and Mexico are bad news |
02/02/25 4:36 PM EST | World |
"it's certainly America's dumbest trade war in living memory. There's really no upside for the country here - it's not going to help domestic manufacturing, it's not going to make Americans better off, it's not going to materially affect the fentanyl problem, and on top of all the economic risks it's going to piss off U.S. allies and make America look terrible. I still hold out hope that the tariffs will be quickly revoked after some sort of symbolic concessions. But if not, then we'll know that we've left the era where Trump just blustered and preened, and entered a more frightening era where he starts lashing out and breaking things." |
More World: Trump gone soft |
Shameless robber barons |
|
Trump gone soft |
02/02/25 4:34 PM EST | World |
"Trump is imposing destructive (and self-destructive) tariffs on an ally that has done nothing wrong, while handling a rival and potential enemy with kid gloves. It is hard to believe that sheer stupidity - although there's plenty of that going on - can explain it." |
More World: Shameless robber barons |
International stocks |
|
The fartcoin stage of the market |
02/01/25 5:46 PM EST | Markets |
"I can't believe I'm saying this, but the current meme coin mania makes the bubble of 2021 seem like a relatively sober exercise in rational valuation. At least back then, Roaring Kitty talked about earnings, and crypto enthusiasts rhapsodized about use cases. They might have been delusional, but at least they were delusional about the right things." |
More Markets: There is no fear priced into anything |
A recession is coming |
|
Shameless robber barons |
02/01/25 5:43 PM EST | World |
"If swindling pays, then it will not stop. The definition of the good society is one in which virtue pays. I can now add a slight variation to this; you cannot have a good society unless virtue pays." |
More World: International stocks |
Explaining international valuations |
|
International stocks |
02/01/25 5:41 PM EST | World |
"This is why some have argued that U.S. stocks are experiencing DotCom Bubble 2.0. The euphoria surrounding AI today parallels that of internet companies in the late 1990s. While I see the similarities, the difference is that the earnings are much bigger this time." |
More World: Explaining international valuations |
Stuck at home |
|
The inflation gamble |
02/01/25 5:39 PM EST | Behaviour |
"we find that high inflation lowers risk aversion, strengthens skewness preference, and increases demand for investments that resemble lotteries. Due to increased gambling demand, lottery-type stocks become more overpriced and earn lower returns in the future. This negative relation is stronger for lottery-type stocks that have greater sensitivity to inflation and are harder to arbitrage." |
More Behaviour: Taking center stage |
Seven pillars of market bubbles |
|
There is no fear priced into anything |
01/27/25 7:13 PM EST | Markets |
"Valuations tell the tale. The current market's price-earnings ratio is top decile for last few decades. Credit-spreads are near record tights. There is no fear priced into anything at the present moment." |
More Markets: A recession is coming |
Valuation indicators to ignore |
|
Tariffs will not make america great |
01/27/25 6:30 PM EST | Taxes |
"Unfortunately cutting taxes and replacing them with higher tariffs simply will not work. The only fiscally sustainable way to reduce the tax burden on working Americans is through spending cuts. Hiking tariffs in order to slash other taxes will do nothing to improve the plight of ordinary Americans and will almost certainly exacerbate their problems. Tariffs did not make America great and they will not make America great again." |
More Taxes: Trading arguments |
Norway shrugged |
|
Explaining international valuations |
01/27/25 6:06 PM EST | World |
"Were a larger percentage of the valuation gap explained by fundamentals, we'd expect such a gap to persist. But given that the valuation gap is primarily explained simply by the location of listing, we think there's a strong reason to expect a convergence - and therefore to favor international over US-listed stocks, despite their terrible relative performance over the past decade." |
More World: Stuck at home |
Misleading indicators |
|
Taking center stage |
01/27/25 6:04 PM EST | Behaviour |
"It's the one asset we're all born with, and it pretty much defines our financial life. I'm talking here about our human capital, our ability to pull in a paycheck. That paycheck - or the lack thereof - drives our ability to save, service debt and take investment risk. It also dictates our insurance needs and how much emergency money we should hold. Put it all together, and our human capital should arguably determine how we manage our money over our lifetime." |
More Behaviour: Seven pillars of market bubbles |
Why we struggle |
|
A recession is coming |
01/27/25 5:41 PM EST | Markets |
"The 1960-61 and 1990-91 recessions are missed (although a 10yr-2yr disinversion might catch the latter), while a recession is predicted for April 2025. Of course, if the inversion failed to predict the 2024 recession, is there reason to believe the disinversion will predict well?" |
More Markets: Valuation indicators to ignore |
2024 in factors |
|
Valuation indicators to ignore |
01/19/25 4:08 PM EST | Markets |
"Here I review four commonly used measures of market overvaluation that you can safely ignore. All four measures say the U.S. stock market is overvalued today. The market might well be overvalued today, but these measures are not good reasons to say so." |
More Markets: 2024 in factors |
Stock market history, illuminated |
|
Wealth or inflation |
01/19/25 4:06 PM EST | Value Investing |
"Assuming financial assets remain inflated, we expect more companies will discover the rewards associated with higher-margin premium offerings. As businesses shift their mix to accommodate the higher end, we believe wealthy consumers will increasingly become the economy's price setters. Moreover, additional gains in household financial assets could lead to further increases in home prices and shelter inflation. If the bond market didn't have enough to worry about, we believe the days of booming asset prices coexisting with tame consumer prices are long gone. Asset inflation is leaking." |
More Value Investing: Simple formulaic investing |
Bargain, value trap or something in between |
|
Problems with passive investing |
01/19/25 4:04 PM EST | Indexing |
"Passive investing has absolutely revolutionized the investment landscape for individual investors. Not only has it dramatically lowered the costs of asset ownership, but it has done so while delivering strong returns. What began as a radical idea to buy the overall market without worrying about picking the winners now accounts for 57% of all equity fund assets and over $13 trillion." |
More Indexing: Bet on low costs |
Disappearing index effect |
|