This page is dedicated to the best articles I read about business, investing and life. On Sunday, I send my five must-reads plus my favorite chart I found during my research. You can sign up to the right(desktop) or at the bottom(mobile).


Friday, April 13, 2018

Some Things I’m Pretty Sure About

From the article:

I increasingly don’t believe in gurus, in any field. Everyone puts their pants on one leg at a time and is susceptible to the same derailing faults as everyone else.

And,

Few superpowers are as super as the ability to change your mind. It is so much easier to fool yourself into believing a falsehood than admit a mistake.

Have a great weekend,

Caleb


Wednesday, April 11, 2018

How Amazon Can Blow Up Asset Management

From the article:

Imagine that you go to the Amazon homepage. You click on a link labeled “Funds”, which is next to the “Prime” link. You are now on a fund products page, featuring a mix of Amazon branded and 3rd party funds.

 

Just as you can buy an Amazon private label sweater for $7 or a branded sweater for $75, you can now buy a large cap U.S. equity index ETF from Amazon with zero management fees or the Vanguard equivalent with 0.04% in management fees.

 

Trading in either ETF would occur with zero transaction cost for non-professional traders. Since placement on the Amazon platform is so valuable, external fund managers pay Amazon a fee, allowing Amazon to charge no transaction cost.

and,

Presentation of fund performance, performance attribution, and risk decomposition are standardized, colorful, and informative. It is superior to similar presentations by industry incumbents because Amazon specializes in presenting information clearly and quickly. At the first layer of detail, the information suits average retail investors. At the second and third level of detail, quant PhDs are satisfied.

If you are in the investment business, it’s worth a read. Even if the probability of it happening is low, it’s a helpful thought experiment.

Have a great day,

Caleb


Tuesday, April 10, 2018

A Sidelined Wall Street Legend Bets on Bitcoin

From the article:

Novogratz had risen quickly, at Goldman Sachs and in the hedge-fund world, but each rise was met with a stunning, often humiliating reversal—first a parting with Goldman, in 2000, over what has been referred to in the press as “lifestyle issues,” and then the removal from his partnership, in 2015, at the high-flying Fortress Group after losing a series of currency bets.

 

Once worth north of two billion dollars, Novogratz had been reduced to the ranks of mere centimillionaires. But 2017 was proving to be pivotal for him and a motley band of other sidelined investors seeking redemption—think the Winklevoss twins—as they tethered themselves to the year’s most befuddling financial event: the rise of cryptocurrency.

Oh to be reduced to a mere centimillionaire…what a tough life…


Monday, April 9, 2018

Elderly women in Japan are stealing so they can find a community in jail. Why? They are lonely

An incredibly sad story about what happens when people feel that no one cares about them. I had a tough time getting through it.

From the article:

“I was imprisoned for the first time when I was 70. When I shoplifted, I had money in my wallet. Then I thought about my life. I didn’t want to go home, and I had nowhere else to go. Asking for help in prison was the only way.

Have a great day,

Caleb


Friday, April 6, 2018

Today’s article is courtesy of Nick Maggiulli of the blog, Of Dollars and Data.

How to Recognize and Prevent Financial Trickery

In this article, Nick describes the ways we can be tricked into making dumb financial/investment decisions. The article is based on Robert Cialdini’s book “Influence”.

From the article:

Do you want to grow wealthy? Do you want to not worry about money again? If I told you that I had the perfect financial product for you, would you like to hear more?

 

The sample line of questioning above can be used to get people on what I call the “Yes” train. Once you start answering “Yes” repeatedly, the commitment and consistency bias makes it harder to say “No.” The only problem with this bias is that if a financial trickster gets you to say “Yes” to products with extraordinarily high fees, you can get into trouble.

Well worth your time.

Have a great day,

Caleb