What caught my eye this week.
The 1970s were a legendarily tough decade – for investors, for the UK economy, and for lovers of understated fashion. In his deep dives into the biggest equity swoons [1] and bond market blow-ups [2], my co-blogger The Accumulator invariably showcases some horror story from the decade that time strives to forget.
Yet as parents and sports coaches alike counsel, it’s from the toughest times that we can draw the biggest lessons.
“High pressure makes diamonds” as people who fire themselves up in the mirror every morning before hitting the M25 like to say.
Which is all good reason to check out the extract from William Bernstein’s new book over on Humble Dollar [3] this weekend.
Once more without feeling
In Courage Required, the veteran investing author reminds us that cheap markets aren’t so easily bought as they appear in hindsight.
Everyone thinks they will buy at the bottom. But in practice you’ll face both practical and psychological roadblocks.
Including Bernstein argues, human empathy:
Empathy […] at least financially, is one expensive emotion, since channeling the fear and greed of others often comes dear.
The corollary to human empathy is our evolutionarily derived tendency to imitate those around us, particularly if they all seem to be getting rich with tech stocks and cryptocurrency.
My own unscientific sampling of friends and colleagues suggests that the most empathetic tend to be the worst investors. Empathy is an extraordinarily difficult quality to self-assess, and it might be worthwhile to ask your most intimate and trusted family and friends where you fit on its scale.
To use a Yiddish word, the more of a mensch you are, the more likely you are to lose your critical faculties during a bubble and to lose your discipline during a bear market.
As somebody who has previously sold some possessions to buy more [4] shares in the midst of bear markets, I’m not sure how to take this.
(Well, I guess I would take it personally, but my apparent lack of empathy protects me…)
Oh well, I’ve always known I think differently [5]. And what equips one poorly for trouble-free dinner party conversation often seems me to be an advantage as an active investor.
Do read the full article [3] over on Humble Dollar and consider getting the latest edition of Bernstein’s book – The Four Pillars of Investing [6] – too.
(Or wait a bit. We might review it soon.)
Have a great weekend!
From Monevator
Which commodities ETF? – Monevator [7]
Leveraged ETFs for the long run* – Monevator [8] [Mogul members [9]]
From the archive-ator: The index fund investor’s guide to avoiding financial hazards – Monevator [10]
News
Note: Some links are Google search results – in PC/desktop view click through to read the article. Try privacy/incognito mode to avoid cookies. Consider subscribing to sites you visit a lot.
Ben Bernanke to lead review into Bank of England’s forecasting – B.O.E. [11]
St James’s Place shares slump on Consumer Duty charge cap – Investment Week [12]
Big lenders cut mortgage deals in sign rates may be peaking – Guardian [13]
Number of households paying IHT jumps 17%; average bill £214,000 – This Is Money [14]
Why productivity is so weak at UK companies [Search result] – FT [15]
Ovo under fire as hundreds of customers claim bills incorrect – This Is Money [16]
[17]
How UK house prices left the middle class behind – Guardian [18]
Products and services
Halifax offers an extra-speedy £150 bank account switching offer – This Is Money [19]
Have children’s savings rates kept up with base rate rises? – Which [20]
Transfer your SIPP to Interactive Investor in July and get from £100 to £3,000 in cashback, plus pay no SIPP fee for six months. Terms apply – Interactive Investor [21]
“I’m secretly a Coutts customer but for people like me there’s no point” – Guardian [22]
Help to Buy mortgage meltdown forcing some homeowners to pay 9% interest – This Is Money [23]
Five things to know about credit reports and credit scores – Which [24]
Open an account with low-cost platform InvestEngine via our link [25] and get £25 when you invest at least £100 (T&Cs apply. Capital at risk) – InvestEngine [25]
ASDA boosts cashback offer on its credit cards. Is it any good? – Which [26]
Victorian homes for sale, in pictures – Guardian [27]
Comment and opinion
Another buy-to-let landlord skedaddles – Indeedably [28]
The dark side of money – The Root of All [29]
Wall Street’s market forecasts: all hat, no cattle – Fortunes & Frictions [30]
The return on hassle spectrum – Of Dollars and Data [31]
Why do thematic funds fail? – Behavioural Investment [32]
Eight ways you can maximize the power of compounding – Finominal [33]
Tips to avoid being scammed on social media – Humble Dollar [34]
Are the markets stacked against the little guy? – A Wealth of Common Sense [35]
Cullen Roche: is cash the best insurance asset? – Discipline Funds [36]
The case for an indexing approach to managed futures [Nerdy] – CAIA [37]
Naughty corner: Active antics
The Nike story [Podcast] – Acquired [38]
Choosing a discount rate – Capital Gains [39]
Don’t expect net income growth of US firms to continue to outrun fundamentals – Verdad [40]
Professional investors are still so scared – Sentiment Trader [41]
‘Disastrous’ SPACs and ‘painful’ IPOs wiped out years of gains – Institutional Investor [42]
Kindle book bargains
Money Men by Dan McCrum [On the Wirecard fraud] – £2.99 on Kindle [43]
The Ride of a Lifetime by Bob Iger – £0.99 on Kindle [44]
How to Own the World by Andrew Craig – £0.99 on Kindle [45]
Environmental factors
July 2023 is the hottest month ever recorded on Earth – Scientific American [46]
When deep-sea miners come a-courting – Hakai Magazine [47]
How farmers used California’s floods to revive underground aquifers – R.T.B.C. [48]
ESG put to the test in a high-inflation world [Search result] – FT [49]
Gulf stream could collapse as early as 2025, study finds – Guardian [50]
Robot overlord roundup
Investing in AI: navigating the hype – Sparkline Capital [51]
Publishers want billions, not millions, from AI – Semafor [52]
Meta’s open source Llama upsets the AI horse race – Wired [53]
The Office repeats mini-special
Ghost town Canary Wharf – The Daily Mail [54]
Don’t schedule meetings after 4pm – Vox [55]
AI, remote work, and office demand – Dror Poleg [56]
Why can’t we shake presenteeism? – BBC [57]
Off our beat
The Comfort Crisis – Mr Money Mustache [58]
How CIA agents begged a Hollywood actor to explain crypto – Rolling Stone [59]
In praise of great lost products, from Cheese Moments to the Skip It – Guardian [60]
The weird sorrow of losing Twitter – Vox [61]
How to craft a good life [Podcast] – Good Life Project [62]
I hate the Hamptons – We’re Gonna Get The Bastards [63]
Visiting death – Overcoming Bias [64] [via Abnormal Returns [65]]
And finally…
“Life is essentially an endless series of problems. The solution to one problem is merely the creation of another.”
– Mark Manson, The Subtle Art of Not Giving a F*ck [66]
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