Good reads from around the Web.
Unlucky, Morgan Housel. The Motley Fool überwriter has just written the ultimate parody of all those pundits who pin the random fluttering of the stock market on the wayward wings of some geopolitical butterfly.
Alas his piece has been published [1] in a rare week when, unusually, there really were explicit moves in the market based on investor’s will-they-won’t-they feelings towards the Russian/Ukranian conflict.
Of course, in a few years we’ll probably be chortling as we look back:
“Remember when we actually thought Russia might invade Ukraine? And NATO might even respond? LOL! And to think they now all rub along together at Disneyland Kiev”.
Well, let’s hope so.
Timing aside, Housel’s article [1] is just the latest in a long line from him that I wish I’d written.
Here’s a taster:
Stocks gained momentum on Monday, with the Dow Jones Industrial Average closing up 48 points, reversing losses from last week’s decline.
Experts hailed both moves as a “remarkable, textbook example of pure statistical chance,” chalking up Monday’s gains to a couple of random marginal buyers being slightly more motivated than a few random marginal sellers.
“Imagine you pick 1 million random people from around the world every day,” said Toby McDade, chief investment officer of Momentum Fee Capital Management. “Some days, 51% would be in a good mood, 49% in a bad mood. The next day maybe it’s the opposite. Other days, random chance could mean 8% of people are really pissed off for no real reason. This is basically what the market is on a day-to-day basis,” he said.
Asked what his clients thought of this view, Mr. McDade laughed.
“Oh my God, you think I could tell my clients that? How could I justify my salary?”
Genius.
Have a great weekend!
p.s. Did you or someone you know fail an A-Level? Richard Branson [2] has some advice. You could also read my own heretical thoughts on university [3].
From the blogs
Making good use of the things that we find…
Passive investing
- The active decisions of a passive investor… – Bason Asset Management [4]
- …indeed, does the LifeStrategy fund count as active? – Oblivious Investor [5]
- Do risk-adjusted returns matter? – A Wealth of Common Sense [6]
- In defence of active managers’ underperformace – Humble Student [7]
Active investing
- The new headline indicators – A Wealth of Common Sense [8]
- Is GlaxoSmithKline’s 5.6% yield worth the risks? – Total Return Investor [9]
- Home bias and some cheap places to invest – Cordant Wealth Partners [10]
- Beware of buying truly distressed companies – The Aleph Blog [11]
- The power of shareholder yield – What Works on Wall Street [12]
Other articles
- How to be part of a ‘lucky’ investing generation – Abnormal Returns [13]
- Slow down – Dividend Mantra [14]
- Metaphors we invest by – The Psi-Fi blog [15]
- How do you buy your food? – DIY Income Investor [16]
- A guide to escaping proletariat drudgery – Simple Living in Suffolk [17]
- What $450/£270 a month gets you in Thailand – Tieland to Thailand [18]
- Okay, one quote from Robin Williams – James Altucher [19]
Product of the week: Buy-to-let lender Paragon’s new bank has launched [20] its first 120 day notice savings account. The 1.9% interest rate is a table-topper, says The Telegraph [21].
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 [22]
Passive investing
- Smart investors ignore the news – Marketwatch [23]
- Reminder: Most of us are terrible market timers – Business Insider [24]
- Do active funds have a future? – Morningstar [25]
Active investing
- Jim Slater: My refined Zulu stockpicking method – Telegraph [26]
- Refining exposure to emerging markets [Search result] – John Redwood/FT [27]
- Gloom as an investor’s best friend – Bloomberg View [28]
- The trouble with discount rates – Morningstar [29]
Other stuff worth reading
- The danger of financial jargon [Missed this last week] – The New Yorker [30]
- What kind of property addict are you? – Telegraph [31]
- The cheapest way to watch football in 2014/15 – Telegraph [32]
- Students who say no to £50,000 of debt – Guardian [33]
Book of the week: It must be summer, because I’m re-reading Guy Thomas’ Free Capital [34]
survivorship bias winning stock pickers, you’re missing out. Highly recommended!
Like these links? Subscribe [35] to get them every week!
- Reader Ken notes that: “FT 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”.” [↩ [39]]