| Valuation indicators to ignore |
| 01/19/25 | | 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."
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| Wealth or inflation |
| 01/19/25 | | 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."
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| Problems with passive investing |
| 01/19/25 | | 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."
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| 2024 in factors |
| 01/19/25 | | Markets |
"Looking at some of the biggest drivers of returns, the global equity factor had higher returns and lower volatility versus the historical average. Similarly, the large size factor, high-investment (AI-driven), and high turnover (lots of trading activity) all did quite well for style factors. Momentum and quality did well but were largely in line with history while value lagged."
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| Trudeau was a poor steward |
| 01/13/25 | | Government |
"The fact is, no one seems to really know what's behind Canada's low productivity growth. Observers agree that low rates of corporate investment, including investment in R&D, are the problem, but no one seems to have a good explanation for why companies aren't investing. And no one seems to know whether Canada's especially bad performance since the pandemic is just an exacerbation of the existing negative trends, or whether some new problem has cropped up in addition."
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| Seven pillars of market bubbles |
| 01/13/25 | | Behaviour |
"Charles Mackay wrote the lurid bestseller Extraordinary Popular Delusions and the Madness of Crowds, which discussed many historical bubbles. Despite publishing his book in 1841 decrying bubbles, in 1845 Mackay himself was caught up in the British railway bubble and advocated buying shares."
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| Spending it |
| 01/13/25 | | Retirement |
"Retirees can pick from a host of withdrawal strategies, including the five popular choices listed below. You'd likely fare just fine with any of the five strategies - but that doesn't mean you shouldn't pick carefully."
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| Stock market history, illuminated |
| 01/13/25 | | Markets |
"What particularly interests us is that - until the last decade - European and US stock markets behaved very similarly over many, many years. Given that many constituents in both markets are global businesses selling many similar products and services multi‐nationally to similar regions, countries and customers, this made sense."
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| The TSX's gains over almost 69 years |
| 01/13/25 | | Stingy Investing |
"When pondering the future, I like to set my expectations by looking to the past, because it offers clues to the rewards, and risks, associated with investing in stocks."
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| Looking back from 2035 |
| 01/05/25 | | Fun |
"Well, sitting here in the year 2035 and looking back at our endowment's returns for the last decade is not a pleasant task. World markets have been subpar and our performance relative to world markets has been simply terrible. Hard times are never pleasant."
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| Simple formulaic investing |
| 01/05/25 | | Value Investing |
"Schwartz and Hanauer demonstrated that simple, easy-to-implement, systematic formula-based investing can still generate market outperformance, providing investors with efficient exposure to well-documented factor premiums."
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| Why we struggle |
| 01/05/25 | | Behaviour |
"Why do some financial situations scare us, while others leave us unperturbed? Why do we spend time and money in ways we later regret? Why do we find our bad habits so difficult to change? Why do we admire some folks, while being jealous of others?"
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| Self defense |
| 01/05/25 | | Behaviour |
"Using the 4% rule as a benchmark for a reasonable portfolio spending rate, Blanchett found that retirees spend, on average, just 2.1%. The upshot: They could afford to double their spending without materially jeopardizing their plans."
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