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The Best of the Aleph Blog, Part 37

Thu, 09 Aug 2018 23:26:08 GMT

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Photo Credit: michel D’anastasio

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In my view, these were my best posts written between February 2016 and April 2016:

On Investment Charlatans

Mostly regarding some scammers pitching preferred stock, but without calling it that.  Always be wary of those that won’t be direct with you.

If Someone Tries to Sell You, Don’t Buy It

“Don’t buy what someone else wants to sell you.  Buy what you have researched that you want to buy.”

They Can’t Help You

On a Letter from an Expatriate

On another type of charlatans, the political sorts.  Two of the few things I had to say prior to the elections in 2016 — the first one about how the problems were bigger than the government could solve, yet the politicians would still promise solutions.  The second was in the same vein, but at greater length.

Fly Away From Helicopter Money

Last set of charlatans, the ones at the Fed.  Using money finance has always led to bad results.  Much as I think the Fed talks about monetary policy lags, and then acts like they don’t believe that, that is a small error compared to helicopter money.  (This one got me a 15-minute interview on an English-speaking financial radio in Seoul, Korea.)

A World Deep in Debt…

Picturing Pensions

Two real long-term problems that our world will have to face.  High private and governmental debt around the world, which may lead to some weak nations defaulting on dollar-denominated debt.  “Weak parts of the Eurozone and Japan are possibilities, along with a number of emerging markets.”  Pensions are another issue, and most of the news globally is depressing.  So much for not having children and not saving.

Financial Market Liquidity Isn’t That Important for the Economy as a Whole

If All Investments Were Private

Though I always consider illiquidity to be a risk factor, for the economy as a whole, liquidity is overrated.  Public policy should not be geared to making all/more assets tradable.  Things that are genuinely illiquid should remain so, lest you have financial crises like the recent housing bubble, where too much money was lent against illiquid assets.

Actual asset performance is more important than liquidity. Analyze your investment selections carefully.

Estimating Future Stock Returns

Estimating Future Stock Returns, Follow-up

The first two articles on The Economic Philosopher’s stock valuation model that I have written.  As an update, the market is currently priced for a 3.8%/year return over the next ten years, not adjusted for inflation.  This is the best model available on future returns, bar none.

Goes Down Double-Speed (Update 3)

On the current bull market, and how it is the second longest on record.  And still is.

Think Half of a Cycle Ahead

On the virtue of realizing that present conditions won’t continue indefinitely, and thinking about when and how the turn will come.

Big Returns, Narrow Doors

“My advice to you tonight is simple.  Be skeptical of complex approaches that worked well in the past and are portrayed as new ideas for making money in the markets.  These ideas quickly outgrow the carrying capacity of the markets, and choke on their own success.”