Weekly: It’s Not Brain Surgery

21 thoughts on “Weekly: It’s Not Brain Surgery”

1. As one goes into pre-retirement and transitions to the real deal (62 for my wife and I) cash income has been my target. Since the dot.com mess that income has enjoyed growth every year (by a middling 5-6%). I’m very happy with that result. My needs are fully met. Mr. Bogle studied the data you showed in your graph and found that when all is said and done even an index fund typically doesn’t beat its own index.

   1. +1.

2. If I consistently beat 8%, I don’t cry.
   I don’t cry much.
   On my 70/30 trading account I beat the S&P this year. I’m having a good year as a gambler.
   I lightened up in February March and went
   60/40. And then brought back in 80/20. Year end at 60/40, sold off some losers to make up for the capital gains in February and March. So now I go shopping with 10%, get a real pull back and I got 40% to shop with.
   Every gambler knows you shouldn’t play with scared money.
   My 401 I let the bank just take care of it, I’m sure at some point they’ll best me. Cause we all know the highly training professionals don’t gamble like us day traders.

3. Wait, wait! I can’t remember – what was the name of that book? Oh yeah, “A Random Walk Down Wall Street.” I think I read that (a few decades ago) while getting my MBA. Assigned reading in an Investments course. That fact alone should tell you something.

4. Amen to the above!

5. I have noticed a Bloomberg article “lag effect” on your posts.

   1. It’s absolutely real, and it sticks out like a sore thumb to me because there’s no such phenomenon w/ WSJ or FT — which is to say if I were seeing it everywhere, I’d know I was imagining it. But it’s only BBG. What’s a bit annoying about it is that there isn’t a single @bloomberg.net address in my entire subscriber base, and although I won’t claim to know the names of everyone who works there, nor will I claim to have ever gone through by own subscriber database line by line looking for names I recognize, I don’t remember an instance of anyone there ever subscribing, which means they’re getting the articles for free somehow, or at least sharing a login, which is a really penny-pinching thing to do. Particularly given how much money I pay them for their products and services, and how assiduous I am in linking back to their coverage which is basically free promotion (not that they need it).

      1. And not for nothin’ — and without mentioning any names — it’s glaringly obvious that BBG only started paying attention to a certain couple of strategists because I name-dropped them incessantly here. We’ve seen that movie before: Marko K. and Zoltan P. became famous in the mainstream financial media because they were mainstays on another independent, market-focused web portal with a huge readership. Unlike that portal, I don’t have a huge readership, but the dynamic was the same.

6. I need to hear this lesson again and again. Along with the truly excellent https://heisenbergreport.com/2023/12/09/dopamine/

   1. Thanks for posting that link. I tried to find that article earlier and couldn’t.

   2. That post was a Heisenberg classic! Not much has changed for me (investment or otherwise) since that post, other than I changed my name from Emptynester to SeaTurtle. Still appreciating a good night’s sleep, a nice long walk, and reading- my current obsession is Jack London- his short stories are really, really good. 🙂

      1. Jack London – top of my list.

   3. That’s a nice re-read.

7. I found a portfolio mix of passive ETFs that has a track record of returning 3-4% above the inflation rate over almost all 10 year periods since the early 70s. It is completely left in the dust by the SP-500 but its volatility is so much lower that I sleep well at night regardless what the markets are doing. Hence, this piece rings especially true for me. I am happy with the risk/reward balance because it suits me psychologically.

   I’d love to share this article with my children but won’t without your express permission.

   1. Yes, feel free to share the article with your children.

8. If you really want to increase your fortune, increase your lifespan. 1 in 3 people die of cardiovascular disease, and if you can prevent that, you can live another 7.5 years longer. That’s some real compounding gains. For a lead I offer up the cheap as chips generic drug Ezetemibe. For some reason most doctors don’t know or care to prescribe it. Best to all.

   1. Sage advice. I’m a 69 year old runner taking Ezetemibe along with statins, just started Repatha as I’m not tolerant of statins.

9. I’ve been taking a statin for a couple of years now. That’s for my health. I invest basically as this article describes. That takes care of the pocketbook. And I read H religiously. That’s to keep the grey matter from seizing up.

   1. And often to provide a great laugh. The wit and snark are extraordinary

10. It seems the new thing to avoid are thieving funds and private equity exit funds. A friend with a teachers retirement account asked me about their investments. I was shocked that her universe of allowed funds included many with 5% loads (remember those?!) and 1.5% expenses! We consolidated into an SPX fund, out of her 5% loads ESG fund and I told her to put the rest in the most venal, evil and regressive company on Earth. This was 2021 and that evil company was PLTR. Recently she told me she sold it to fund an AirBnB as it gained well over 1000%. Who said evil doesn’t pay?

11. All investors should know this, and that is, that 20% of all stocks account for the entire gain of the S&P over long periods of time, give or take certain periods in history. That means that the other 80% for the most part give no return at all. There are studies that have proven this, so you can go and find this information on the Ai Inter-Webs. Being cap weighted the S&P 500 is the largest momentum strategy there is.

    Just knowing that allows you to decide how to properly allocate your money.