Articles and ideas that caught my eye this week.
The big mistake is thinking they know when to buy and sell stocks,” Buffett says with a chuckle. “That there are times to buy ’em and times to sell ’em. There’s times to buy ’em. And eventually maybe, when you decide to start dis-saving when you’re 70 or 80 years of age or something of the sort, at that time you may sell ’em. But basically any attempts to pick the times to buy or sell, I think, are a mistake for 99% of the population. And I think that even attempts to pick individual securities is a mistake for people.” – Yahoo
From Monevator
Don’t forget your can opener [On prepping for financial freedom] – Monevator
Dividends are not guaranteed – Monevator
From the archivator: Rich friends, poor friends – Monevator
News
Note: Some links are Google search results – in PC/desktop view these enable you to click through to read the piece without being a subscriber.1
House prices see first quarterly fall for five years – ThisIsMoney
Revealed: The cheapest and most expensive places to die – Guardian
Help! My house has been hijacked [New fraud alert, search result] – FT
Emerging market valuations look more appealing than most today – Twitter
Products and services
Crowdfunding platform Seedrs is launching a secondary market – Business Insider
Best fixed-rate ISA returns drop 25% in a month – Telegraph
Zopa has been given full FCA authorisation and aims to launch innovative ISA soon – Zopa
Comment and opinion
Bad investment returns? Your birth year may be to blame – Of Dollars and Data
Waiting for higher bond yields is irrational if you’re passive, and risky – Canadian Couch Potato
How can I minimize tax on my pension? [On the £1m lifetime allowance, search result] – FT
Academics argue the return factors justifying Smart Beta strategies and the like are flawed because the initial research gave too much weight to tiny companies – Bloomberg
Closing the self-awareness gap – Abnormal Returns
The fallacy behind populism and automation fears – Investing Caffeine
Should you use a trailing stop loss to reduce risk? – Oblivious Investor
Will Thorndike on how skilled capital allocators compound capital [Podcast] – IFG
The most interesting thing about the Buffett / Seides hedge fund bet – The Big Picture
Buffett predicts Berkshire shares will rise the morning after he dies – Bloomberg
One theory why the stock market is so weirdly calm… – New York Times
…and the varied ways people are trying to protect their portfolios in response – Bloomberg
Hedge funds are out of ideas […and lagging the market in 2017] – Bloomberg
Dalbar’s famous numbers showing how poorly individual investors time their fund investments are dead wrong, says another researcher… – Advisor Perspectives
…but Dalbar replies people have the wrong notion about what its data shows – Advisor Perspectives
Off our beat
“Mrs. May’s idea that her opponents are merely playing self-interested political “games” is a classic populist trope, one that suggests that constitutional democracy is really an obstacle standing between people and leader. The prime minister’s rhetoric since calling the general election has implied that the best outcome for “the national interest” would be to eradicate opposition altogether, whether that be in the news media, Parliament or the judiciary.” – New York Times
Simple maths explains why Elon Musk’s companies keep doing the barely possible – Quartz
Why first-born children are better leaders – The Atlantic
Give your kids an elite private school education (without the cost) – The Escape Artist
The Great British Brexit robbery: How our democracy was hijacked… – Guardian
…and discover what the psychometrics software makes of YOU – Apply Magic Sauce
Oldsters in their graves could swing a second EU referendum vote – Guardian
Meanwhile, Western civilization could collapse – BBC
And finally
“The traders who did badly were hopelessly emotional about the whole thing. They spent hours trying to get it right – and got caught up in lots of different strategies, confused themselves, took wild gambles. Refused to sell losers. They lied to themselves and others about their losses. They got into terrible states.”
– Robbie Burns, Trade Like A Shark
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- 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”. [↩]
Great chart of EM, thanks!
Never heard of The Escape Artist before but i might become a regular reader
I’m surprised the FT article about death tax didn’t make the cut. I thought the comments section alone was worth wasting my lunch break on Friday.
Regarding the article “The Great British Brexit robbery: How our democracy was hijacked… – Guardian”, if you want a further insight into how hedge fund CEO Robert Mercer bought a sizeable share of the Trump presidency, then the New Yorker did a (very long) article about him http://www.newyorker.com/magazine/2017/03/27/the-reclusive-hedge-fund-tycoon-behind-the-trump-presidency.
@hosimpson — Which one was this? 🙂 There was a spate of them last week, when it was postponed from the finance bill (though not sure I included one then). It was in the links 3-4 weeks ago.
Feel free to pop a link here if you think it’s worth a read, ideally as a search result.
@ZXSpectrum — Will have a read later. The Guardian one is concerning enough. 🙁 I’m not so motivated by the influence of an individual (it’s important, but not novel) so much as the sudden massive influence of outsized analytical strength on the electoral process. The introduction of tech imbalances swinging elections is potentially in the systemic failure category.
The guardian article was great. Earned some cash from me – exactly why we need to fund journalism!
The NY times article on Theresa May’s approach to democracy (actually, her opposition to it) is interesting. It is curious that overseas interests can sense what is happening to us here but so many of our own voters are blind to it; on the other hand, Americans are very sensitive to this sort of thing. I remember listening to an American commentary on the Trump inauguration and hearing concern that Trump might start talking about strong leadership and the will of the people, which they would taken as a warning sign of impending tyranny. I then switched channel and got Theresa may talking about, yes, strong leadership and the will of the people. It is also ironic that one of the distinct reasons people voted for Leave was to “take back control” when the end result is that we are quickly losing control.
FT article as a google search result that hosimpson referred to.
“Conservatives eye post-death taxes to fund social care”
http://bit.ly/2qg0CUO
Everyone knows taxes have to rise because of the demographics, even with cuts to public spending.
Everyone also knows that taxes were far too low since the late 1980s for all of the promises made about the future.
The open market price of the state pension at 67 is around £248k.
I sense that PAYE earnings can not be squeezed anymore.
There is a deep and embedded unfairness in low interest rates. Those with assets have done extraordinarily well (house prices, pensions, equities and long duration vonds
Therefore positioning prior to the onslaught is key.
That should have read ‘long duration bonds’.
Almost universally the young know their future has been stolen.
The financial crisis should have seen the likes of me hammered. I bought a house in 2006, both my wife and I work in financial services and yet our pay has risen a bit and our net worth has soared.
Since 2007, we have paid a much lower rate of marginal tax on increased wealth than we did when we started out as graduates, due to the accumulation of capital that isn’t taxed at all increasing much more rapidly than PAYE earnings.
The truth is we all needed to take the medicine during the financial crisis, so those with assets who voted for the system that was in place and fell apart, should have paid for it. We needed a reset. But we did not do that. All we seem to have done is used every trick available to kick the can down the road, increasing wealth for those with assets, at the expense of those that follow without assets. The medication is being given over decades to those starting out.
Taxes must be raised and so all forms of unearned wealth will be under the spotlight, as I think there is agreement that PAYE has reached it’s tax limit.
With no effective opposition Prime Minister May will be aware that she shouldn’t let brexit go to waste.
I am expecting a lot of fiscal and tax raising changes. Hopefully there will be radical proposals.
I am even considering selling my house to lock in the tax free capital gain before that is hit.
Here you go.
Conservatives eye post-death taxes to fund social care A lot of it is same old boring stuff, but some of the comments … priceless. Perhaps that Distressed Investment Bankers Charity wouldn’t be such a bad idea 🙂
Rich friends, poor friends! Good article from the archive. Almost as old as that Seneca letter I quoted in the comments two posts ago.
@ JonWB I agree that there will be some tax increases under the Tories. All the signs are there. But I am not sure there will be anything other than a nominal effort to tax wealth/assets. I think its important to remember why the Conservatives exist. They are there to stop wealth being eaten by the masses. That is why they seem agnostic on so many other issues. They are interested overwhelmingly in being in power so that they can fulfil the main mission; everything else is secondary. So a figleaf attempt to be seen to tax wealth, maybe, but I suspect that that is all we will see.
@William III — Glad you saw that one, was thinking of our conversation when I plumped for it. 🙂
Merryn ft: “how much is rich”. Best thing I’ve read this week. Goes into many of the above issues.
Just this week I was just looking at some finance media articles from 2012-13 saying that Emerging looked cheap, that was before the commodities crash when they suddenly got even cheaper, so it’s clear how patient you have to be with this. One quote looks hysterical in hindsight:
“Currency risks, too, have diminished as the traditionally expensive currencies of Brazil and Russia are moving within 10 per cent of fair value” http://www.btinvest.com.sg/markets/stocks/emerging-markets-looking-attractive-jpmorgan/
Russian ruble and Brazilian rial both down 40% since that article. Currency risks alive and well.