In 2014, Lewis H. Lapham wrote a wonderful essay for The New York Times Magazine called “Old Masters” with the subtitle “After 80, some people don’t retire. They reign.” It profiled people in their 80s — and beyond — getting better and better at what they do. The profiled individuals spanned a wide range of […]
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The 2-Minute Thought: Industry Concentration, Monopoly Power
The conventional wisdom today is that U.S. stock prices are high and a correction is due. But what if stock prices actually can stay elevated for a long time to come? U.S. stock valuations have been high for longer than many expected. As Jeremy Grantham of money manager GMO shows in the chart below, the […]
The 2-Minute Thought: Lying and Deception
Do you think that when people lie, they avoid eye contact, fidget, or stutter? It’s a widespread belief across cultures. But it is not so. Gaze aversion, posture shifting, rapid eye blinking, and similar cues do not help us detect dishonesty. That’s one of the surprises of a recent research study published by CFA Institute […]
The Science of Football…and Also Investing?…
Back in March 2008 we wrote a piece about football (only we Americans call it soccer). Football matches are low scoring affairs often decided by just one goal. When a penalty kick is awarded, the Goalkeeper is just 36 feet away from the shot taker and has all of 0.2 to 0.3 seconds to react. […]
Whistling Past the Grave Yard?…
We don’t usually discuss technical analysis. We are fundamental analysts with a long time horizon. We practice Value investing, looking for companies whose shares are trading cheap relative to earnings and assets. Technical analysts argue that everything that you need to know about future stock prices is embedded in past prices and volume. But two […]
Update on the Korean Peninsula…
A lot has been happening on the Korean Peninsula, both North and South. In our March newsletter we covered the impeachment of South Korea’s former president Park Geun-hye and public fury over political corruption. Since then, former President Park has been arrested; the first liberal South Korean president in a decade, Moon Jae-in, has been […]
What We Do When We Don’t Know…
Humans have evolved to be great at many things. We are uniquely able, for example, to master complicated speech patterns and engage in complex reasoning. But the big brains that make these things possible can also get us into trouble. In situations where there is a lot at stake and where the outcomes are uncertain, […]
The 2-Minute Thought: The Best Way for Individual Investors to Compete
Individual investors often forget that active investment is a competition. It is you against the person on the other side of the trade. If you are buying, you should always be thinking about what the seller knows that you don’t. Michael Mauboussin and his colleagues Dan Callahan and Darius Majd at Credit Suisse wrote as […]
The 2-Minute Thought The Distance Between North and South Koreans
Every five years, the East Asia Institute surveys South Koreans on whether they view North Korea as “one of us,” “a brother,” “a neighbor,” “an enemy” or “other.” In 2005, 51% of South Koreans said they saw North Korea as “a brother” while only 15% selected “enemy.” But by 2015, 41% of South Koreans said […]
The 2-Minute Thought: Learning to Listen Better
People are terrible listeners. An oft-cited statistic is that we spend 60% of conversation time listening to others but can only remember 25% of what is said. In an article on what they call the “Plateau Effect,” Bob Sullivan and Hugh Thompson wrote that half the adults asked to sit through a 10-minute oral presentation […]
We Are All Optimists on This Bus…
As you can see from the chart below Wall Street is a pretty optimistic place. The lines show what analysts were estimating for corporate profits at the beginning of each year versus how they turned out. Over thirty years of tracking these numbers only twice have the S&P 500 companies delivered earnings higher than first […]
The State of Your Wallet…
There are some truisms in America we hold dear. One is we see ourselves as a land of opportunity where if you work hard enough you can be a success. A second is that each generation will do better than the last. If you were born in 1940 there was about a 90% chance that […]
