What caught my eye this week.
A quick housekeeping note – it transpires the Google Sheet we embedded into our fund-of-funds update this week didn’t get inserted into at least some emails.
If you were confused – or thought the image from Trustnet was the sum total of all the tabling we had for you – then you’re in for a treat! Or at the very least, less confusion.
Please see the full article with table on Monevator. (Sorry for the mishap. I’d say it’s Google’s fault but they can afford better lawyers than we can.)
Incidentally, I know there’s a whole tribe of you who only read Monevator via email and have forgotten the blog ever existed. For example, now and then a reader will write to me to explain they can’t see how to “let us know in the comments below” in their email, or similar.
If that’s you, then you might check out the blog now and then you know. Especially for those reader comments. Like all village squares we have one or two… characters… but the vast majority are constructive contributors.
In particular, we can’t usefully reply to many of the personal reader queries we get over email, for a whole stack of reasons. But a comment left on a new article will often elicit a useful response.
Career change in range
Finally, last week’s article from The Atlantic on the half-life of a cutting-edge working life touched a few nerves.
If you’ve reflected on it and wondered if it’s now time to do something different, I came across an interesting book extract on a blog called Quiet Revolution this week. The new book’s author, David Epstein, argues that taking a roundabout route to where you want to be has an illustrious history, adding:
Career goals that once felt safe and certain can appear ludicrous, to use [Charles] Darwin’s adjective, when examined in the light of more self‐knowledge.
Our work preferences and our life preferences do not stay the same, because we do not stay the same.
Epstein’s book is called Range: Why Generalists Triumph in a Specialized World, and to somebody who decades ago resolved – after an early brush with computer science – to ensure I didn’t need to know the deep details of anything just to pay my rent, the title appeals.
Given how many stories we hear from worried mid-lifers that go something like “I know the youngsters are keeping me away from the machines” – as one of those smart commenters of ours put it – it might be worth a read.
From Monevator
Fund-of-funds: the rivals – Monevator
From the archive-ator: A landlord is someone who borrows money on your behalf – Monevator
News
Note: Some links are Google search results – in PC/desktop view you can click to read the piece without being a paid subscriber. Try privacy/incognito mode to avoid cookies. Consider subscribing if you read them a lot!1
First-time buyers now need to earn £54,000 to buy average property in UK city – Guardian
Average retiree needs a retirement pot of £447,000 to get them from 65 to 100 – ThisIsMoney
German landlord says rent cap for Berlin is better than becoming like London – Bloomberg
Vanguard crosses $1 trillion in ETF assets – ETF.com
Digital bank Monzo raises another £113m at £2bn valuation, eyes US market – TechCrunch
Amazon is now the largest shipper of Amazon products – Axios / Rakuten / via Abnormal Returns
Ageing population to alter the economic landscape of the UK [Search result] – FT
Products and services
Comparing Vanguard’s LifeStrategy and Target Retirement Funds – IT Investor
How discount brokerages make money [US but relevant, for us nerds] – Kalzumeus
Ratesetter will pay you £100 [and me a cash bonus] if you invest £1,000 for a year – Ratesetter
How to make BA Avios points go the extra mile – ThisIsMoney
You’ll be able to switch your mobile phone network with a text from Monday – Guardian
Bitcoin’s bonkers price volatility is back – Coindesk
Coastal homes for sale [Gallery] – Guardian
Comment and opinion
Compounding gone wild – A Teachable Moment
Here are three ways investors can reduce stock market risk in their portfolios – Fortune
Are smarter people better investors? – Of Dollars and Data
“Don’t sell stocks in a downturn” – Oblivious Investor
Very few funds beat their benchmark index: Part Gazillion – The Financial Bodyguard
The FTSE 100 looks cheap, the FTSE 250 not so much – UK Value Investor
With prices hitting a six-year high, should you invest in gold? [Search result] – FT
Media must address whatever role it played in the Woodford bubble – Robin Powell
The tyranny of small debts, compounded – Seth Godin
The road to riches is this simple: Drive a crappy car – MarketWatch
Solving the happiness conundrum – Financial Samurai
Talking of crappy, what’s going on with value stocks? – Humble Dollar
Defending Value Investing with Tobias Carlisle – Valididea
Brexit
Why we remain hopelessly deadlocked on Brexit – Times / YouGov / Simon Lambert via Twitter
I’m a civil servant – and we can’t make Boris Johnson’s no-deal fantasy into reality – Guardian
Brexit bill for financial services reaches £4bn [Search result] – FT
Foreign investment into UK falls to lowest level in six years on Brexit fear [Search result] – FT
Geoffrey Boycott on no-deal Brexit – Guardian
Kindle book bargains
Busy: How to thrive in a world of too much by Tony Crabbe – £0.99 on Kindle
The Millionaire Next Door by Thomas J. Stanley – £0.99 on Kindle
How to Make a Living with Your Writing by Joanna Penn – £0.99 on Kindle
The 80/20 Principle: The Secret of Achieving More with Less by Richard Koch – £0.99 on Kindle
Off our beat
The world’s first solar train – via YouTube
What is causing the European heatwave? – Guardian
Picking up plastic straws in front of a steamroller – Abnormal Returns
Deep: The sponge that grows around and traps a shrimp in a gilded cage – via Twitter
Finland’s Latin language news show ends its 30-year run – Guardian
And finally…
“Owning the stock market over the long-term is a winner’s game, but attempting to beat the market is a loser’s game.”
– John Bogle, The Little Book of Common Sense Investing
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I don’t get the email… I don’t read the blog in a browser… I use an rss reader. Quick at getting advised when a new post is posted. Long may you keep this feature.
@John Root — Wow, that is legacy. It’s not really supported by any of the platforms much now, and I should warn you it may go when I finally bite the bullet and properly move the email list to something like MailChimp. (I wouldn’t get too worried — that’s been on my To Do list for five+ years! 😉 )
What, get rid of RSS? Please, no, it’s so easy, don’t know what I’d do without it.
I do worry that may have placed both of us in a certain demographic!
David
Noted! 🙂 I might be talking nonsense, anyway. I just have in my head pieces of knowledge telling me our RSS is supported by near-defunct product Feedburner, which also (mis)handles the email, that I need to move email to a proper and well-supported platform like MailChimp, and that when I last read about RSS it was in articles saying it was dead. (The gist being it was ‘legacy’ web, from the good old days before ‘the stream’ –i.e. Facebook and Twitter.)
But it may be that I can move the email list and keep an RSS running — will now definitely try to do so based on these comments.
Cheers for the interest!
“Amazon is now the largest shipper….”
Really? I did an order yesterday and had quite a challenge getting to the £20 order minimum for add on items. I had to buy a book and a cd (now they’re legacy). So is this a US only development or what?
Re RSS : You’ve in excess of 3k people subscribed just on Feedly (the RSS reader), no ?
@Ben — It’s the largest shipper of *Amazon products*. The article talked about a worldwide fleet so I presumed the statistics were global (which would knock out all the local carriers from the ‘largest shipper of Amazon products’ except perhaps the US Postal Service I suppose. It’s really up against FedEx and UPS. The articles have some amazing stats about its carrier fleet.)
@Nathan @Others — Re: RSS, this is the sort of article I’ve been reading, casually, without doing much deep research:
https://techcrunch.com/2018/04/07/rss-is-undead/
I have no intention to specifically stop producing RSS-able content, if such a thing is possible. But those articles strongly suggest spending a lot of time thinking about it is worrying about a minority sport.
@TI
From the Axios link
“Amazon is about 40% of all e-commerce. If they’re handling half of their own shipments, that’s 20% of the whole market,”
So we are talking about them beating UPS, FedEx and all the locals combined.
Slightly off topic but vanguard have just this week released a hedged global bond index ETF.
If I ever move away from 100% equities (VWRL) this will be my bond holding
That Fortune article on stockmarket risk is simple but illuminating. If this table below is trustworthy then it is amazing to see how the risk of negative returns is reduced by holding longer than 5 years.
U.S. Stock Market Historical Probabilities
Positive Negative
Daily 54% 46%
Monthly 63% 37%
Yearly 73% 27%
5 Years 88% 12%
10 Years 95% 5%
20 Years 100% 0%
S&P 500: 1926-2018
Table: Ben Carlson SOURCE: DFA
….talking if books TI, how is the proof reading going?
@MrOptimistic — I’m editing page 297 as we speak. But there’s a long way to go after that, as things have turned out. (And I I need to finish my bit about property…)
“I’m a civil servant – and we can’t make Boris Johnson’s no-deal fantasy into reality”
Missed this myself, so thanks for highlighting it.
Particulary “Ad astra per mendacium” – to the stars by lies.
Oh my.
Loved the link to the Icelandic latin programme.
Back in the day, I remember my latin master, Mr. Dignum (if you can believe it), who was a firm adherent to the Catholic grammar school philosphy that the best way to instill latin into young boys was at the point of a bamboo cane.
Yet it left me with the philosophy of ‘Noli nothi permittere te terere’, or, more crudely put, ‘nil illegitmi carborundum’.
Happy days
Another Feedly/RSS reader here.
The days of having to find and copy an rss url are largely gone, thankfully. Apps like feedly have discovery built in so you just pick Monevator from the list. All very civilized.
A rather gloomy Tuesday morning in early July, despite the sunshine, a cool NW wind is blowing. At last, property prices are beginning to think about heading south, P2P lender Funding Circle’s share price is down 25% (boy, am I glad to have entirely avoided that ‘opportunity’), a sterling crisis might be on the cards and the BoE has little ammunition to defend, billions of pounds worth of gilts have to wash out into the market one day, and two politicians are seemingly making reckless spending ‘promises’ to 160,000 people – plus la change.
I attended an investment conference in Exeter a few days ago, mainly featuring ‘fund of funds’ managers – both passive and active – and there was a palpable air of impending crisis in their ‘house views’, which, considering the kind of event it was, was quite extraordinary. One speaker, an excellent chap from a South African-owned firm called Orbis, reminded IFA’s that the markets a shouting ‘don’t buy’ at the moment. Good for him.
Some seem to have forgotten that the purpose of making an investment is the purchase of an income, period. Look at UK property, and all the nonsense about it worth £trillions in the press recently. Clearly, the entire housing stock cannot be monetized, because it can only be sold to those who already own it. Valuing the entirety based on marginal transactions is therefore false (unless the Martians buy it all). I’m also sure that the way of valuing of financial assets (bonds and stocks) has been forgotten, too. There are two main ways, I think, of valuing these, as Dr Tim Morgan recently pointed out.
“The first way, and this is old news, would apply to all earning assets. Their value, surely, is the future stream of income that the owner gets from them. So, with bonds, that’s the coupon stream. For a company, or for a factory, or a family business, it’s the future stream of dividends, or of earnings, since all earnings should eventually accrue to the owner as dividends. The future income stream, projected, totaled and discounted to current value with adjustment for inflation and for the time value of money, is the NPV (net present value) of DCF (discounted cash flow). There are clever variants around this theme, but the principle is straightforward enough.”
“The second way is what somebody else will pay the owner for it. Critically, though, there ought to be some relationship between them – for why should somebody buy a future income stream for more than the NPV of that income stream? The potential price that somebody else will pay for an asset, though, is linked to NPV only if we assume rational behaviour – step forward the greater fool.”
Only a few days ago, Schroder published research saying that individuals expect income of 10% and a capital return of 20% over the next year (or something like that) and that the average investment is only held for about 2 years and 6 months.
Then people who have elected for drawdown, an a non-advised basis, are seemingly going to run out of money very quickly.
Yikes! Hold on to your hats!