“Timeo Danaos et dona ferentes” – Beware the Greeks bearing gifts – Virgil, Aeneid (II, 49) The more articles I begin with a Latin aphorism, the more I can feel myself slowly starting to recoup my expensive ancient history degree – one shoehorned semi-relevant Virgil quote at a time. I’ll try not to overdo it. …
Having just opened a Native American jewellery store in Arizona, the owner was having trouble selling some of her turquoise pieces. Despite the jewellery being high quality, and it being the peak of the tourist season, they just wouldn’t sell. She’d priced the jewellery reasonably. She’d tried placing them in a central display location. She’d …
If you win at blackjack in a casino, you take someone else’s money. If you lose, someone else takes your money. There’s no wealth being created or destroyed, it’s just the same cash being redistributed between the players. That’s a zero-sum game – more for me means less for you. Other examples of zero-sum games …
Figuring out how much money is in the world is an interesting question. Not one which has any real practical value, but it’s an interesting one. And what’s the point of having a blog if you can’t answer interesting questions? Contents How much money is held in: Cash Cryptocurrencies The stock market Debt …
It sounds like a pretty basic question, doesn’t it? We all know that, in the long run, markets rise over time. But answering why stocks go up is surprisingly difficult. Contents Stocks go up because companies make money Why will companies generate more cash in the future? If most companies die, why do markets keep …
About a dozen or so friends from school and I have a WhatsApp groupchat which has now been running for over 10 years. It started as a way for us all to keep in contact as we started university, and has carried on ever since. I was trawling through the hundreds of unread messages on …
Although I managed to avoid catching coronavirus in 2020, I did catch another virus, of sorts. Its symptoms included: Increasing levels of claustrophobia as my house was slowly invaded with bookcases Payments to ‘AMAZON UK’ metastasising throughout my spending history A virtuous feeling, shared only by vegans, which manifested itself in having the uncontrollable urge …
Who would’ve thought people were so interested in bonds? Certainly not me. After this post: ‘The best Vanguard passive index tracker funds for UK investors’, which is now by far and away the most popular post on this site, the number one comment I received was “This is all great stuff, but what’s the best …
“What goes up when stocks go down?” is one of the most important questions an investor will have to find the answer to. But the answer isn’t a simple one. Diversifying away from pure equity exposure is critical for those who don’t have the willingness or ability to invest in an equity-only portfolio. We’ve seen …
What’s the best crash protection for your portfolio? Read More »
As a UK investor myself, I struggle to find useful analysis aimed at sterling investors at the best of times. Almost all of it is US-centric, and this is especially true when it comes to gold. The purpose of this article, then, is to examine gold from a UK perspective, and answer the question of …
A few years ago, one of my friends asked me to meet with his father to discuss his portfolio. He’d been managing his own portfolio for the last 20 years or so, and wanted some advice. He’s kindly agreed to me sharing his story for this article, but for the sake of privacy I’ve changed …
If you’re an investor based in the UK, you’ve probably heard of Vanguard. They’re a hugely popular fund manager, and offer a slew of attractively priced, predominantly passive, funds for investors to choose from on their platform. But with so much choice comes some tricky decisions. Which fund, or funds, should you choose? Which is …
The best Vanguard passive index tracker funds for UK investors Read More »
To those who have made it to the conclusion of this series, I salute you. We’ve covered a lot of ground in the last eight posts, but hopefully now you’ve reached the end you have a more evidence-based opinion on why it’s unlikely that passive investing causes bubbles. I appreciate there’s been a lot of …
A summary: Is passive investing causing a bubble? Read More »
This is the eighth part in a series examining the evidence behind the claim that passive investing is causing a bubble. For the previous part, which asks the question, “Where are all the outperforming active managers?”, click here. — “Every morning in Africa, a gazelle wakes up, it knows it must outrun the fastest lion …
Why passive investing is increasing market efficiency Read More »
This is the seventh part in a series examining the evidence behind the claim that passive investing is causing a bubble. For the previous part, on whether passive investing is causing large stocks to get even larger, click here. — If passives were distorting prices, if dispersion was reducing, and if equity concentration was increasing, …
Where are all the outperforming active managers? Read More »
This is the sixth part in a series examining the evidence behind the claim that passive investing is causing a bubble. For the previous part, on whether passive investing is making the market more concentrated, click here. — Looking at the behaviour of the largest stocks in the world can offer us some interesting insights …
This is the fifth part in a series examining the evidence behind the claim that passive investing is causing a bubble. For the previous part, on whether passive investing causes market crashes click here. — “Last year was a particularly narrow year for the stock market.” If you’ve ever read a market commentary from your …
Is passive investing making the market more concentrated? Read More »
This is the fourth part in a series examining the evidence behind the claim that passive investing is causing a bubble. For the previous part, on whether passive investing is setting prices, click here. — Let’s assume for a moment that there is a relationship between indexing and market crashes. Indexing, for whatever reasons, increases …
This is the third part in a series examining the evidence behind the claim that passive investing is causing a bubble. For the previous part, on how much of the market is passively invested, click here. — In the previous section we looked at whether enough of the market was invested in passives to cause …
This is the second part in a series examining the evidence behind the claim that passive investing is causing a bubble. For the first part, on Sharpe’ Arithmetic of Active Management, click here. — For any investment strategy to distort the market, it must be big. Very big. And, despite all the clamour around the …
Is passive investing really worse than Marxism? Is it creating a ‘frightening risk for markets’? Or are the concerns around passive investing nothing more than trumped-up fearmongering? This series begins by examining one of the most fear-inducing (and therefore one of the most persuasive) claims thrown at passive investing – that the rise of passive …
Following on from my last article on ‘The best investing books for beginners’, which proved to be a popular post, I’ve compiled a list of my favourite investing blogs below. Eventually my intention is to collate all my favourite resources (books, blogs, and podcasts) into one place, so this post makes a start at collecting …
I’m starting to lose track of the number of people who ask (online and in person) what the best beginner investing books are. To collect my thoughts, and so that I’m able to send a link rather than having to explain each book every time I’m asked, I’ve compiled a list of my 5 favourites. …
Let’s say I offer you a simple gamble. You take £100 of your own money, then toss a coin. If it’s heads, you win 40%, if it’s tails you lose 30%. Would you accept the gamble? Simple maths says you should – the expected return is +5% (50% * 1.4 + 50% * 0.7). But …
I work as an investment manager, and a few years ago I had a boss called James (not his real name). His job was mainly portfolio construction, but he occasionally took client meetings and provided portfolio updates to some high net-worth individuals alongside the relationship managers. He had a vast repertoire of favourite sayings that …
