Please note that The 2-Minute Thought will be on holiday for 2 weeks and will resume July 7. Consider these poll results recently cited in The Economist: Americans think 33% of the population are immigrants – the actual number is 14%. Britons think 24% of their population is Muslim – the actual number is 5%. […]
Julie Won
What you should know about stock returns…
What really drives stock returns? 1) Well first it is not GDP growth. This one may come as a surprise. Many people think GDP growth is key to stock returns but as shown in Chart 1, from Ben Inker of asset manager GMO, there is no discernible relationship between a country’s GDP growth and its […]
The 2-Minute Thought: Do Liberal Arts Majors Become Great Investors?
Is liberal arts education good preparation for becoming an investor? Perhaps . . . George Soros majored in philosophy. So did activist investor Carl Icahn. Larry Fink, the CEO of BlackRock, majored in political science. Peter Lynch studied history, psychology, and philosophy. Stephen Schwartzman, CEO of the Blackstone Group, had his own interdisciplinary major incorporating […]
The 2-Minute Thought: Older White Men Are Preferred As Financial Advisors
Wealthy investors are most likely to prefer having older white males as their financial advisors. That’s according to a study done by Spectrem Group, a researcher focused on the investment industry. The study asked affluent investors to look at the photograph below and make a snap judgment about which of the eight financial advisors they’d […]
The 2-Minute Thought: Value Investing Isn’t Dead
Historically, value investing has outperformed. It hasn’t done so year in and year out – and it can certainly underperform over shorter periods of time. But over longer multi-year periods, it has outperformed. The evidence in its favor holds across markets, countries, and eras. Yet value investing has had a terrible period of underperformance the […]
Can This Kingdom Modernize?
Up to now, Saudi Arabia has survived on oil. Half its GDP and 80% of its exports are from hydrocarbons. But Saudi Arabia is no Norway. Rather than build for the future, it has used oil wealth to fund cushy public sector jobs and generous cradle-to-grave welfare. That’s resulted in a frail private sector that […]
The 2-Minute Thought: Richard Yamarone Says These Five Indicators Point To Recession
Bloomberg economist Rich Yamarone says that a U.S. recession is coming. He won’t say when or how — just that too many things don’t look right. Speaking to the San Francisco Chartered Financial Analyst (CFA) Society yesterday, Yamarone said we are in “Bizarro World.” That is a world where 13 countries have negative yields on […]
The 2-Minute Thought: The Golden Era of Investment Returns Is Over
Investors should set their sights lower, according to a recent study by McKinsey Global Institute called “Diminishing Returns.” The report says that 1985-2014 was a golden era for investment returns that is unlikely to be repeated and that investors will need to get used to a world of lower returns. That’s because the confluence of […]
The 2-Minute Thought: To Invest in Tobacco and “Sin Stocks” – Or Not?
Last week, the California Public Employees’ Retirement System, or “Calpers,” said it is considering investing in tobacco stocks again. If it decides to do so, it will be a noteworthy reversal. As the U.S.’ largest pension fund, Calpers’ actions carry weight. Calpers divested from tobacco in 2000, but not for the social responsibility reasons some […]
The 2-Minute Thought: The Stories We Tell About Manufacturing
There are all kinds of narratives about manufacturing. The old narrative from pre-financial crisis days was that globalization was taking manufacturing away from developed economies and giving it to emerging markets that had cheap labor. The 2000s were all about the hollowing out of textile mills in the U.S. while China became manufacturer to the […]
The 2-Minute Thought: Stocks We Chose Not To Buy
We choose not to buy many of the stocks we look at. In fact, we pass on most. Nevertheless, we learn a lot from looking at all of them – and then looking back at them again after we’ve said “no.” As value investors, we look for stocks selling for less than we think they’re […]
What Does It Take To Get Ahead?
Meet YY Lam, rock star (pictured). Okay, he’s not really a rock star, but he kind of looks like one. He’s got the hair, the $190,000 sports car and lots of adoring fans. What Mr. Yat-yan Lam really does is teach Chinese language at one of Hong Kong’s biggest private after-school tutoring institutes called Beacon. […]
