There has been a good deal of concern about stock buybacks in recent years ranging from concerns that buybacks are a poor allocation of resources to the idea that buybacks [ … ]
Category: Myth Busting
(Popular Myths of the Economy and Markets….BUSTED!
Passive Investing isn’t Hurting the Economy
The new sales pitch for the high fee active manager goes something like this: “passive investing has gotten so large that this creates greater opportunities for us to take advantage [ … ]
Why Equity Outperforms Credit
In my new paper on asset allocation I go into quite a bit of detail about why certain asset classes generate the returns they do. Understanding this is useful when [ … ]
Is Indexing Just Another Wall Street Fad?
Here’s an interesting comment from value investor Seth Klarman on the rise of indexing (this is from 1991!): Klarman is obviously biased because he’s in the business of selling a [ … ]
Let’s Talk About the US Government’s Interest Burden
Greg Ip had a piece in the Wall Street Journal yesterday discussing the debt burden in the USA and how low interest rates have “moved back” the “hands on the doomsday [ … ]
The Importance of Global Asset Allocation – Japan Edition
I’m a big fan of owning a global financial asset portfolio consistent with something resembling the Global Financial Asset Portfolio (though, I would also add that this portfolio isn’t necessarily ideal).¹ [ … ]
Dear Hedge Funds: Index Funds Didn’t Eat Your Returns
Indexing strategies have been the fastest growing segment of the asset management world in the last 15 years due to low fees, tax efficiency, diviersification and the failure of higher [ … ]
5 Big Macro Myths
James Montier of GMO wrote a wonderful piece earlier this week that I am just getting around to posting. Pragcap readers will really enjoy it as it covers a lot [ … ]
The Money Multiplier and the Myth that Just Won’t Die…
Almost every single mainstream economic textbook teaches some version of the money multiplier theory of banking. In short, this is the view that $1 of central bank reserves allows a [ … ]