Good reads from around the Web.
You know that most active funds fail to beat the market. I know that most active funds fail to beat the market.
And all our fondly farewell-ed readers who got the message, bought a one-shot passive indexing product instead, and then went off to read about 20 Stars Who You Won’t Believe Commune With The Dead Using A Ouija Board knew it, too.
But plenty of people don’t, so I guess we’ll keep repeating it. It’s a bit late to change lanes!
So here’s the same message in a new video featuring Professor David Blake from Cass Business School, courtesy of The Evidence-Based Investor:
Lots more below – enjoy!
From the blogs
Making good use of the things that we find…
Passive investing
- Diversification is no fun – A Wealth of Common Sense
- Rising stars are often the first to fizzle out – Evidence-based Investor
- The tortoise beats the hare. Literally. [Video] – YouTube [Via Gregory]
Active investing
- On analyzing stocks with a partner – Gannon on Investing
- Trumptopia: Winning sectors since Prez-Elect’s victory – The Reformed Broker
- Is the Yale model broken? – Chief Investment Officer
- Two charts for those who say the value bounce is done – Value Perspective
- Private bankers: Ever dance with the devil by the pale blue light? – FireVLondon
Other articles
- Irrational Exuberance: 20 years on – Crossing Wall Street
- Who moved my cash? – SexHealthMoneyDeath
- Inflation, not rising interest rates, is the bond killer – The Irrelevant Investor
- How to read more books – The Investor’s Field Guide
- Trump taps into the desire people have for a job not a safety net – Tim Duy
- Financial planning for the top 1% – Evergreen Small Business
- Tim Ferriss: 10 keys to a successful business – Growth Lab
Product of the week: Bond yields have been rising, and we’ve probably passed the nadir for interest rates. HSBC just pulled what was celebrated as the cheapest-ever mortgage – the bank’s 0.99% two-year fixed rate deal – reports ThisIsMoney.
Mainstream media money
Some links are Google search results – in PC/desktop view these enable you to click through to read the piece without being a paid subscriber of that site.1
Passive investing
- What Buffett and Soros look like as factor portfolios… – Bloomberg
- …Pffft, says veteran Charley Ellis, who owns one global fund – Marketwatch
- Can the passive tailwind keep blowing for ETFs? [Search result] – FT
- With $3.8 trillion, giant-slayer Vanguard is a giant. What next? – Fortune
Active investing
- Spread betting is for gamblers, not investors [Search result] – FT
- Joining the index is no way to beat it – Morningstar
- Best UK dividend payers have been property skewed of late – ThisIsMoney
- Shale producers are already locking in $50+ oil with hedging – Bloomberg
A word from a broker
- Japan: New dawn or false dawn? – Hargreaves Lansdown
- What’s happening to the Eurozone? – TD Direct Investing
Property and house prices
- Buy-to-let landlords feel vilified by tax changes – Guardian (and data)
- BTL fading, landlords may be “forced” to hike rents [LOL] – Telegraph
- Will central London’s property price falls spread? [Search result] – FT
Other stuff worth reading
- OECD: ‘Pension apartheid’ in UK worst in developed world – Telegraph
- The time-to-cash-in final salary pension meme is spreading – Telegraph
- How entrepreneurs can make peace with undiversified investments – NYT
- Keynes versus Hayek: Who’s winning now? [Podcast/Search result] – FT
- How seven (US) couples do money – Bloomberg
- A short history of the theory of increasing returns – Fast Company
- EU negotiators to offer British citizens an individual opt-in – Independent
- David Lammy: Brexit skeptics are not “enemies of the people” – Guardian
- When the checkout lines go away – Bloomberg
Book of the week: Every week I turn down dozens of would-be lucrative requests to insert paid links or run sponsored posts on this website. Here’s a better way to get yourself featured on Monevator – try citing us in your classy book. I recently discovered veteran science writer Robert Matthews showed such acumen and good taste within the pages of Chancing It, his deep dive into the laws of probability. The book came out earlier this year and boasts strong reviews.
Like these links? Subscribe to get them every week!
- Note some articles can only be accessed through the search results if you’re using PC/desktop view (from mobile/tablet view they bring up the firewall/subscription page). To circumvent, switch your mobile browser to use the desktop view. On Chrome for Android: press the menu button followed by “Request Desktop Site”. [↩]
🙂
Am I alone in thinking Ferris to be pure snake-oil?
It perplexes me that seemingly sane people seem to be listening to his podcasts and linking to his latest writings.
I read his 1st book (I now understand he’s written millions all with the no. 4 in the title) and felt very similar as I did after reading kiyosaki.
When I say ‘written’ I mean he’s paid an Indian a pittance to write it for him.
I mean brain quicken. Come on.
Or have I missed something?
Did you know Charles Ellis has invested in a company that makes active stock picking?
“CONSUELO MACK: And you invest in Berkshire-Hathaway, correct?
CHARLES ELLIS: I do, have done for almost 40 years. I think he’s going to be able to do it for as long as he wants to. But I couldn’t possibly predict who is the next best chance for being Warren Buffett. Warren is a fabulous individual. The rest of us aren’t.”
http://advisoranalyst.com/glablog/2010/04/18/wealthtrack-interview-with-charles-ellis-and-jason-zweig.html
P.S. Maybe he runs with the hare and:)
@The Rhino — I think Ferriss is great for what he is, which is a sort of latter-day Dale Carnegie. He’s clearly somewhat Marmite-y but I think despite the polemics he’s got quite a winning vulnerable side that makes him a perceptive interviewer in particular. Admittedly you do have to plow through a few of those podcasts to get in-tune with that though. He basically comes across as someone with some fairly reasonable talents (not least drive and ambition) who has through determination and good fortune found ways to both get on in life and to get together with incredibly successful people, and he shares what he’s found and learned. I find that hard to dislike. As for the 4HWW, whenever I do anything you might find in that book in my real-life, it tends to get better. (Firing employers, taking breaks, outsourcing, focusing on capital and stocks over flows, etc). But I don’t do it enough, by a long shot. And lots (most) of it can be found elsewhere (especially post-4HWW, which I do think was something of a novel synthesis). But that’s sort of the point of Ferriss. 🙂
@Gregory — Buffett is Buffett. Even the people who did the factor portfolio in the passive links above admit that!
@The Investor — I don’t know anyone who doesn’t admire Buffett but this is the point: Berkshire’s success depends on two people.
Buffett goes beyond being active as in choosing which shares to buy, he’s also active in that in many cases he gets deeply involved with the companies he buys.
Yesterday I watched the Moneyballl film https://en.wikipedia.org/wiki/Moneyball_(film) again. It reminds me of the factor-based investing.
Thanks for the links this week, TI.
The ongoing rampage of US stocks / Bonds / London Property continues and brings all the usual dilemmas and commentary. Is it too far? Is it a bubble? What’s to be done? AWOCs covers the cycles of returns nicely, and it points to the idea that all you need to do is gradually rebalance through the cycles, because it’s a mug’s game trying to predict them. Those of us who dumped out of bonds some time ago, are still waiting for the big yield rise, and losing out on the tail-end of a rally in the meantime, and chatting with a property investor last night with a little more property to manage than most of us, the air grew colourful as discussion turned to London commercial rents and what’s going to happen when the yields finally start to climb. Same for US stocks — record highs never feel like a bad time to be selling, but when they come along each week, which do you pick?
It all comes back to discipline and having a plan. Boring, I know, and I seem to fail to manage it with 100% but if I can keep most of it out of my hands then that’s a pretty good result.
Buffett (oft quoted, not personally a fan of holding him up as an example for individual investors unless the example is to be a billionaire, buy cheap and intervene hard — his insights into costs and compounding are valuable, however) and Ferris (read his first book, read the back of the other books) I do have a bit of a soft spot for, but not so much that I will read much more of his stuff.
@TI – this excellent article (link below) came out a little late to be included in your latest weekend roundup of interesting financial teachings, but I think you will appreciate it.
It’s a thoughtful analysis of the malaise corrupting our current financial/political system, leading to many economies on low-interest, life support drips (while savers despair of decent returns at an acceptable level of risk) and nations teetering on the edge of chaos as their voters, in desperation, are tempted by populists:-
https://surplusenergyeconomics.wordpress.com/2016/12/12/83-backlash-part-2/#comments
Haha – I just found Taleb’s take on Brexit and Trumpocalypse – classic Taleb..
https://medium.com/@nntaleb/the-intellectual-yet-idiot-13211e2d0577