On Pigs, Cobwebs and Howard Marks

Laurence Articles

I can guarantee a few things about Howard Marks’ new book, Mastering the Market Cycle. You will enjoy the thoughtful writing in clear language, and you will learn one great, and I believe correct, idea about the operation of markets. But you will not master the market cycle. Nobody can. What you can do, as part of a broader program …

On Pig Farming, Cobwebs and Howard Marks

Laurence Articles

I can guarantee a few things about Howard Marks’ new book, Mastering the Market Cycle. You will enjoy the thoughtful writing in clear language, and you will learn one great, and I believe correct, idea about the operation of markets. But you will not master the market cycle. Nobody can. What you can do, as part of a broader program …

Conference Roundup: Cullen Roche on Why We’re All Active Investors

Laurence Articles

Cullen Roche, an Encinitas, California chicken farmer, heterodox thinker, monetary theorist, blogger (http://www.pragcap.com), and investment manager specializing in taxable portfolios spoke at the Foundation Financial Officers Group (FFOG) semi-annual conference in Santa Barbara on October 24, 2018. He is the founder of Orcam Financial Group. In addition to my other roles I am the investment thought leader for FFOG, and …

Michael Lewis on the Hidden Benefits of Competent Government

Laurence Articles

Michael Lewis is such an engaging writer that it’s been said he could tell a gripping story about a piece of dirt in the road — beginning with the geological origins, several billion years ago, of the dirt’s mineral components. Lewis can write conservative (The Blind Side) and he can write liberal (“Obama’s Way”). He can turn nerdy statistical analysis …

Michael Lewis’ Frightening Account of Government in the Age of Trump

Laurence Articles

Michael Lewis is such an engaging writer that it’s been said he could tell a gripping story about a piece of dirt in the road – beginning with the geological origins, several billion years ago, of the dirt’s mineral components. Lewis can write conservative (The Blind Side) and he can write liberal (“Obama’s Way”). He can turn nerdy statistical analysis …

Conference Roundup: Sam Huntington’s Clash of Civilizations 20 Years Later

Laurence Articles

In 2003 I attended a talk by Samuel Huntington, the late Harvard historian who made a big splash with his 1997 bestseller, The Clash of Civilizations and the Remaking of World Order. It was an “answer song” to The End of History and the Last Man, written by Francis Fukuyama, one of Huntington’s former students and protégés. Fukuyama’s book proposed …

What Investment Risk Means to You, Illustrated: Strategic Asset Allocation, the Budget Constraint, and the Volatility of Spending During Retirement

Laurence Articles

Investment advisors, managers, and their clients talk about balancing risk and return when advising clients on their strategic asset allocation (SAA) policy for the overall portfolio. This is true whether the client is an individual, a pension plan, a foundation or endowment, or a sovereign wealth fund. SAA investment policy or strategy is typically set by choosing from among a …

Introduction to: The Prosperity Puzzle: Restoring Economic Dynamism

Laurence Articles

Is the world economy in a long-term slowdown? Are our best days behind us? Is productivity growth, widely agreed on as the principal driver of broader economic growth, headed for a long period of subpar performance? If so, what can we do to remedy the situation and restore economic dynamism? Investors, business leaders, policymakers, and academic economists each have their …

Don’t Be Fooled by the Yield Curve

Laurence Articles

For the first time in at least 40 years, there’s a fundamental economic reason that a yield curve near-inversion might not herald a recession. The U.S. Treasury yield curve is currently flatter than usual, not quite inverted but close enough to make some people nervous — since, in the past, recessions have almost always followed. I will make the case …

Don’t Be Fooled by the Yield Curve

Laurence Articles

For the first time in at least 40 years, there’s a fundamental economic reason that a yield curve near-inversion might not herald a recession. The U.S. Treasury yield curve is currently flatter than usual, not quite inverted but close enough to make some people nervous – since, in the past, recessions have almost always followed. I will make the case …

Foreword to: Popularity: A Bridge Between Classical and Behavioral Finance

Laurence Articles

Why does value investing work? Why do other factor strategies work? For that matter, why does any active strategy — meaning, any strategy other than cap-weighted indexing — “work” in the sense of having a reasonable chance of beating the cap-weighted index other than by random variation? The Classical Answer The answer could arise in classical finance, or behavioral finance, …

Byron Wien on Trump, Trade, Deficits and Thucydides

Laurence Articles

On June 27, 2018, I spoke with Byron Wien of the Blackstone Group, a longtime friend of Advisor Perspectives and the author of the widely-followed Ten Surprises series of predictions, which Byron has produced for 33 years. For many years, Byron was chief U.S. investment strategist at Morgan Stanley. If you are in the camp of those who think Donald …

The People versus Themselves: Two Views on Populism

Laurence Articles

These are tough times for lovers of freedom and democracy. After a quarter-century of spectacular progress following the fall of the Berlin Wall, liberal democracy has yielded to autocracy in a variety of countries. And, even in thriving democracies such as the United States, voters are embracing populism in reaction to perceived economic stagnation, widening income disparity, and disruption of …

Conference Roundup: Bubbles for Fama

Laurence Articles

At the Q Group in Palm Beach, Florida, on May 7, 2018, Robin Greenwood, a Harvard finance professor, presented a paper, “Bubbles for Fama,” that he co-authored with Andrei Shleifer and Yang You. The Q Group is a discussion group where directors of research and other senior investment professionals interact with finance academics. Founded in 1966, and conducting two seminars …

Is Life Improving? Documenting the Remarkable Progress of Humankind

Laurence Articles

The rise of populism has been fueled by rhetoric bemoaning the downward plight of the middle class, and that chorus has been joined by many from the left. But are we really worse off than we were a generation or a century ago? Not according to Steven Pinker, whose new book documents the dramatic improvement in lives across the globe. …

Byron Wien on Trump, Trade, Deficits and Thucydides

Laurence Articles

On June 27, 2018, I spoke with Byron Wien of the Blackstone Group, a longtime friend of Advisor Perspectives and the author of the widely-followed Ten Surprises series of predictions, which Byron has produced for 33 years. For many years, Byron was chief U.S. investment strategist at Morgan Stanley. If you are in the camp of those who think Donald …

Conference Roundup: The Annotated Russell Napier

Laurence Articles

On April 5, 2018, I attended the Foundation Financial Officers Group (FFOG) joint conference with a European foundation group, EFFIO, in Milan, Italy. The most engaging and erudite speaker was Russell Napier, a former asset manager with Baillie Gifford, Foreign & Colonial, and CLSA, and now independent. Napier founded Electronic Research Interchange (ERIC), a platform for independent investment research; and …

Why Nassim Taleb Thinks Leaders Make Poor Decisions

Laurence Articles

Why do experts, CEOs, politicians, and other apparently highly capable people make such terrible decisions so often? Is it because they’re ill-intentioned? Or because, despite appearances, they’re actually stupid? Nassim Nicholas Taleb, philosopher, businessman, perpetual troublemaker, and author of, among other works, the groundbreaking Fooled by Randomness, says it’s neither. It’s because these authorities face the wrong incentives. They are …