Most Recent Stingy News
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| The Stingy News Weekly: July 21, 2024 |
| 07/21/24 5:41 PM EST | SNW |
| This week we have long-term returns, growth bias, overconfidence, and more |
| More SNW: The Stingy News Weekly: July 14, 2024 |
| The Stingy News Weekly: July 7, 2024 |
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| Don't take the last dollar |
| 07/21/24 4:56 PM EST | Behaviour |
| "Ultimately, the best way to negotiate is to not take the last dollar. It's to always negotiate as if you're playing an infinite game. Of course, no game is truly infinite. But, you should act as if it is in almost all cases. Even when you know that an infinite game is ending (i.e. becoming finite), you should still pretend its infinite. Why? Because how you behave in those situations will follow you. It's your reputation you have to worry about. And your reputation is an infinite game. It lives on even after you're gone." |
| More Behaviour: Overconfidence and emergency planning |
| The risks we miss |
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| A time traveler's guide |
| 07/21/24 3:29 PM EST | Markets |
| "Although he did note that actually these long-term performers had somewhat moderate returns - on an annualized basis - compared to the companies that periodically pop up throughout stock market history through surging and capturing the imagination of an entire generation of investors, before ultimately fizzling out. Think RCA in the 1920s, Polaroid in the 1960s, or Cisco in the 1990s. 'Really high returns,' he wrote to us. 'Don't persist.'" |
| More Markets: Neglecting equilibrium |
| US stocks are much more expensive |
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| Highest long-term returns |
| 07/21/24 3:28 PM EST | History |
| "Annualized compound returns to these top performers relatively were modest, averaging 13.47% across the top seventeen stocks, thereby affirming the importance of 'time in the market.'" |
| More History: The unexpected origins of discounting |
| Cumulative vs. cyclical knowledge |
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| Neglecting equilibrium |
| 07/21/24 3:25 PM EST | Markets |
| "The biggest difference between an academic view of markets and the view of actual investors is that most investors believe that higher future earnings growth means higher future stock returns, whereas academics believe this information is priced in by an efficient market." |
| More Markets: US stocks are much more expensive |
| Did inflation kill the CAPM? |
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| Overconfidence and emergency planning |
| 07/21/24 3:23 PM EST | Behaviour |
| "The median subjective emergency fund ratio is 1.4, indicating that most respondents perceive their emergency funds to cover only 1.4 months of expenses. Only 28% of respondents perceive that they need at least three months of emergency funds. Overconfident respondents perceive a significantly lower emergency fund ratio compared to those with appropriately high financial knowledge. The overconfident group reported their emergency needs to be 21.4% lower than those with higher objective and subjective financial knowledge." |
| More Behaviour: The risks we miss |
| A balance of regrets |
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| Asset managers' profits get thinner |
| 07/21/24 3:09 PM EST | Funds |
| "In addition to feeble inflows and weaker company brands, the cost of doing business as an asset manager continues to meaningfully rise. Operating expenses grew at a rate between 2020 to 2023 that has cut into profits. The growth rate for data and technology was 13 percent over those three years; operations was 9 percent; business and support functions was 6 percent; investment management was 5 percent; and sales and marketing was 4 percent." |
| More Funds: Ray Dalio's famous trade is sputtering |
| Performance of the hedge funds |
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| The Stingy News Weekly: July 14, 2024 |
| 07/14/24 6:42 PM EST | SNW |
| This week we have risk, regret, cyclical stocks, and more |
| More SNW: The Stingy News Weekly: July 7, 2024 |
| The Stingy News Weekly: June 30, 2024 |
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| The risks we miss |
| 07/14/24 2:42 PM EST | Behaviour |
| "I've long argued that, to build wealth, we should avoid chasing investment performance and instead focus on three less-exciting endeavors: saving diligently, keeping a tight lid on investment and other costs, and managing risk." |
| More Behaviour: A balance of regrets |
| Investors should expect the worst |
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| A balance of regrets |
| 07/14/24 2:39 PM EST | Behaviour |
| "The bad news about diversification is that regret is a constant problem. The good news is that by spreading your bets, you avoid taking that regret to the extreme." |
| More Behaviour: Investors should expect the worst |
| Permission and trust climb in value |
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| The superior returns of cyclical stocks |
| 07/14/24 2:38 PM EST | Value Investing |
| "So now you know what to buy. Cyclical stocks with low valuations. Then hold on to them for a long time. This is really the hard part because value investing is already psychologically demanding, but value investing in highly cyclical companies is a step up from that." |
| More Value Investing: Mean reversion, or extreme aversion? |
| Francis Chou talks at Ivey |
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| US stocks are much more expensive |
| 07/14/24 2:34 PM EST | Markets |
| "The US trades at almost a 2x premium to the rest of the world on EV/sales. And we see an even more dramatic story on price-to-book multiples" |
| More Markets: Did inflation kill the CAPM? |
| The buyback wall of shame |
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| The Stingy News Weekly: July 7, 2024 |
| 07/07/24 1:29 PM EST | SNW |
| This week we have retirement, buybacks, inflation, and more |
| More SNW: The Stingy News Weekly: June 30, 2024 |
| The Stingy News Weekly: June 22, 2024 |
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| Did inflation kill the CAPM? |
| 07/06/24 4:30 PM EST | Markets |
| "Currently, with the excess CAPE yield below 3% and inflation above 3%, expected returns are low. Historically, after such periods, the market return was close to zero, but factor strategies still delivered positive returns of about 3% after inflation. Therefore, while the immediate future may not be promising for the equity premium, it looks bright for factor premiums." |
| More Markets: The buyback wall of shame |
| Chasing the biggest stocks |
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| Inflation impacts retirement |
| 07/06/24 4:20 PM EST | Retirement |
| "As much as I love running retirement scenarios using the 4% Rule, this is where they fall short. The 4% Rule assumes that retirees are robots who indiscriminately increasing their spending with inflation each year. Unfortunately, all the empirical evidence suggests that this isn't how retirees behave. If anything, retirement spending tends to go down over time, not up." |
| More Retirement: Looking different |
| Life after cars |
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| Companies are lousy market timers |
| 07/06/24 3:58 PM EST | Management |
| "The reason to rain on the buyback parade is that companies on average are lousy market timers: they tend to repurchase shares when prices are high." |
| More Management: Beware of companies moving targets |
| The quotations of chairman Ray |
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| Beware of companies moving targets |
| 07/06/24 3:56 PM EST | Management |
| "We are approaching the end of the second quarter and soon, companies will start reporting their results for the previous three months. Unfortunately, as research from D.A.T.A. shows, the results for Q2 and Q3 tend to be the least truthful results in the year" |
| More Management: The quotations of chairman Ray |
| Return-to-office mandates |
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| Looking different |
| 07/06/24 3:53 PM EST | Retirement |
| "But suddenly, I am the oddball. I'm a 61-year-old with perhaps as little as a year to live, and that means my financial life today doesn't look like that of anybody I know - in seven key ways." |
| More Retirement: Life after cars |
| The C word |
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| The Stingy News Weekly: June 30, 2024 |
| 06/30/24 2:14 PM EST | SNW |
| This week we have value, buybacks, Europe, and more |
| More SNW: The Stingy News Weekly: June 22, 2024 |
| The Stingy News Weekly: June 16, 2024 |
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| The buyback wall of shame |
| 06/29/24 8:26 PM EST | Markets |
| "With the stock market trading at record highs, corporations are aggressively buying back stock. Some consider the current level of buybacks as a sign of confidence. Given valuations, we view it as a sign of capital misallocation and profit extrapolation." |
| More Markets: Chasing the biggest stocks |
| The penny stock anomaly |
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| Mean reversion, or extreme aversion? |
| 06/29/24 8:16 PM EST | Value Investing |
| "In other words, it is the value stocks in Europe which have been hit the hardest. Harder than the growth stocks, and even harder than US value stocks. Much harder, in fact." |
| More Value Investing: Francis Chou talks at Ivey |
| Valuation multiples |
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