Weekend Reading – Asset Returns since 1900 & Warren Buffett’s Shrinking Alpha
Weekend Reading is a collection of Investment Research and Lifestyle topics from all corners of the Web.
We source the highest quality insights from Wall Street and Main Street that you may apply to your investment process.
Unlike the rest of Bankeronwheels.com, this series is provided without additional guidance.
As usual, everything is to be used at your own risk.
TYPE OF CONTENT
- Youtube
- Reading
- Podcast
- Academic
- Twitter Thread
Our satisfactory results have been the product of about a dozen truly good decisions – that would be about one every five years.
INVEST WISELY
This section is dedicated to research on how to invest for the Long Run using Passive Investment Strategies. Read Topics related to (i) Portfolio Construction and Asset Allocation (ii) Acting wisely by avoiding behavioural traps and also (iii) publications that help understand how financial markets work.
CONSTRUCT YOUR PORTFOLIO
Can You Trust The Banker? How To Choose The Best S&P 500 and MSCI World ETF.
Back in 2009, I managed client portfolios of CDO and CDO-Squared – some of the most complex, and toxic, financial instruments ever assembled by Wall Street Banks. After working out structured finance portfolios, synthetics raised my eyebrows. Not very Golden-retriever friendly, to say the least.
But over the past years, the products got safer. So why investors choose them?
- Global Investment Returns Yearbook: Data From 1900 & Perspective for today's investors (Credit Suisse)
- Do stocks always outperform bonds? (Verdad)
- How can young earners protect their income? (Bogleheads Live - 32 min)
- On Goals Based Planning - Financial planning 101 (Excess Returns - 22 min)
- Exploring the basics of cost of living, savings capacity, and emergency funds. (Rational Reminder - 1 hr 16 min)
- Functional Allocation Frameworks (Meketa Investments)
How to Review Your Portfolio Performance (Peter Lazaroff - 11 min)
Measuring the success of your portfolio is important for several reasons, but most people don’t know how to properly measure the success of their portfolios. What are the differences between Portfolio-Based Benchmarks and Goals-Based Benchmarks & meaningful questions to ask when evaluating performance.
HOW TO INVEST
- Charlie Munger: Active managers in ‘extreme denial’ about lagging index returns (ETF Stream)
- How important is flexibility while maintaining your long term goals? (ChooseFi - 54 min)
- How to Win Before You Even Start Investing (The Onveston Letter)
- Risk seeking when fearful (Joachim Klement)
- Pursuing perfection is not the surest way to perfection then what is? (Morningstar)
- Short termism is our default setting (Behavioural Investment)
- personal finance success is directly attributable to getting the boring stuff right. (Best Interest)
In conversation with Myron Scholes on How To Invest Your Money (What Happens Next? - 44 min)
UNDERSTAND FINANCIAL MARKETS
- Lessons from the 1970's & The Road Ahead (Man Group)
- Comprehending the Bond Pull Back (Morningstar)
- Stocks and inflation hedging (Institutional Investor)
- A deep dive into the mind of expected stock returns (Alpha Architect)
- Strong Data Could Push The Recession Down The Road (Vanguard)
- The Chinese Economy looks East for "inspiration" (FT.com - click on the first link)
Tim Buckley on Finding His Purpose With Vanguard (Bloomberg - 48 min)
Bloomberg Radio host Barry Ritholtz speaks with Mortimer “Tim” Buckley, who is chairman and chief executive officer of Vanguard. Previously, Buckley was Vanguard’s chief investment officer and chief information officer, overseeing the company’s internally managed stock, bond, and money market portfolios as well as its investment research and methodology.
ACTIVE INVESTING
This section relates to improving your knowledge about active investing. If you decide to sin, then sin only a little. Given ample evidence, combined active bets should be ideally a relatively small fraction of your portfolio.
FACTOR & Thematic investing
- JP Morgan Markets Guide to China (JP Morgan)
- Is small cap investing right for you? (Of Dollars and Data)
- Revisiting value, growth & Intrinsic investing (Intrinsic Investing)
- Understanding Managed Futures (Flirting With Models)
- Low volatility strategies may not be what they are made out to be (Advisor Perspectives)
- 3 views on the future of growth investing (Capital Group)
In conversation with Blackrock's Head of Thematic Strategy (Meb Faber - 56 min)
Kate Moore is BlackRock’s Head of Thematic Strategy and a member of BlackRock’s Global Allocation investment team. Kate shares her framework for looking at markets from the perspective of a “macro equity investor.” Then she shares her view of global markets today and what key investible themes she’s focused on today.
STOCKS
- The AI Wars Explained: Is Google the Next Yahoo? (Joma Tech - 13 min)
- Worth more than Netflix? time for Alphabet to spin off YouTube (The Economist, Paywall)
- Testing the dominance of interest rates vs. earnings on equity market returns (Joachim Klement)
- Business Debt & Equity Returns (Aswath Damodaran)
- Finance 101: Deep Dive In to the Cost of Capital (Morgan Stanley)
A data-driven approach to picking growth stocks and thematic baskets (Flirting With Models - 14 Min )
It’s no secret that high flying growth stocks were hammered in 2022, so here is a revisit of a conversation with Jason Thomson.
Jason is a portfolio manager at O’Neil Global Advisors, where he manages highly concentrated portfolios of growth stocks.
SUSTAINABLE investing
This section is about Sustainable Investing. You can invest in a Socially Responsible way but there are many ESG traps. Learn how to invest sustainably, and what it means for expected returns, with the our definitve guide to sustainable investing.
3 Sustainable Investing Strategies That Actually Work
There are at least three proven sustainable investing strategies.
To keep it simple, you may hold a non-screened portfolio and, use the incremental profits for philanthropy.
If you want to avoid investing in certain types of industries, e.g. Tobacco companies, you may select cost-efficient and well-diversified SRI Funds. The most active sustainable strategy is Impact Investing.
ALTERNATIVE ASSET CLASSES
- Comprehensive Guide to Private Equity (Bain & Company)
- REITs are not as effective as an inflation hedge as they are thought to be (Institutional Investor)
- Direct Real Estate Investing: A story of property owning returns (Fire V London)
- In conversation with the man behind the $85bn VC firm Sequoia (Patrick O'Shaughnessy - 1 hr 10 min)
FROM WALL STREET
Asness on Bloomberg about a Historic 2022 for AQR Hedge Fund
- How does Berkshire Hathaway’s trailing 10-year alpha stack up against the S&P500? (Brian Feroldi)
- The 2022 Berkshire Investor Letter 11 pages (Berkshire Hathaway)
- This Year's Buffetisms: The 2022 Berkshire Shareholder Letter (Investment Talk)
- Thinking About the Tail End and the Long-Term. (Neckar)
- In conversation with PIMCO Group CIO on All Things fixed income (Capital Allocators - 45 min)
Choice Architecture & Role in Financial Decision Making (Rational Reminder - 51 Min)
The decisions we make may be further out of our control than we’d like to imagine. Today we are joined by Professor Eric J. Johnson to discuss choice architecture and its role in financial decision-making. Eric is a decision science expert and the author of the book, The Elements of Choice: Why the Way We Decide Matters. In this episode, we learn about the various factors that impact not only decision-making but the effort required to make a decision. Eric shares his philosophy on free will and shares advice for making important decisions and guiding clients to find the right choice as a financial advisor. Tune in to discover how to minimize the influence of the choice architect and take charge of your decisions!
crypto & blockchain
REMINDERS TO PUNT RESPONSIBLY
In conversation with Madoff Trader & Investor Andrew Cohen (Excess Returns - 51 min )
With the recent release of the Netflix documentary “Madoff: The Monster of Wall Street,” many of us have been learning more of the details behind the scandal. Andrew Cohen, participated in the documentary and was both a trader on the legitimate side of Madoff’s business and a victim of the Ponzi scheme. Andrew gives us an inside look at what it was like to work in the Madoff organization and takes us through the timeline of events from when he started there to when the Ponzi scheme was uncovered.
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As of 29/03/2024, Interactive Brokers offers rates up to 4.738% (GBP), 3.445% (EUR) and 4.83% (USD) on cash.
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As of 29/03/2024, Interactive Brokers offers rates up to 4.738% (GBP), 3.445% (EUR) and 4.83% (USD) on cash.
DIVE DEEPER - BOOKS & MOVIES
In the Book review section we rate some of the most relevant resources related to Financial Independence, Personal Finance and Investing. Browse All Book and Video Reviews.
15 Years On, We Fall For The Same Tricks – Madoff: The Monster of Wall Street On Netflix (Review)
The 2023 Netflix docuseries Madoff: The Monster of Wall Street dives into the largest Ponzi scheme in history, worth $64.8 billion.
Although the Madoff madness stopped in late 2008, today’s investors still fall for the very same tricks.
What exactly can we learn from this series?
Let’s have a closer look.
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PERSONAL FINANCE
This section is dedicated to UK and European Products. It can also touch on other European jurisdictions outside the Euro-zone.
Live, Love, Later - The Ultimate Early Retirement Checklists
- The first ‘L’ is Living Life. How do you plan around life essentials while reducing unnecessary costs?
- The second ‘L’ is Loving Life. It’s usually the mismanaged L. It’s not only about the destination but also the journey and values that define you today.
- The third ‘L’ is Later Life. How to invest wisely for Early Retirement.
FINANCIAL PRODUCTS
- Vanguard closes UK financial advice arm after less than two years (FT - CLick on First link)
- Here are 8 of the best spreadsheet templates for tracking your net worth (Tiller)
- Ireland is tax efficient for ETFs except for the Irish (ETF Stream)
- UK: Banks take a U turn on sub 4% mortgage rate. (This is money)
- UK: An innovative offering for first time Home buyers (This is money)
COST OF LIVING
OUR Community
Question of the week
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As of 29/03/2024, Interactive Brokers offers rates up to 4.738% (GBP), 3.445% (EUR) and 4.83% (USD) on cash.
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As of 29/03/2024, Interactive Brokers offers rates up to 4.738% (GBP), 3.445% (EUR) and 4.83% (USD) on cash.
DESIGN YOUR LIFESTYLE
This section is dedicated to the ‘Why’ of Investing, trends or career choices.
LIFESTYLE
- 100 centenarians’ 100 tips for a life well lived (Guardian)
- How to “Die With Zero” – The Math Behind the Mindset (Money Flamingo)
- Trading Places With Warren Buffet (Owen Stoneking)
- You’re not bad with money. But you can get better. (VOX)
- How to be a digital nomad in Madrid? (FT.com - click on the first link)
Optimising Life For Maximum Fulfilment (Bill Perkins - 50 min)
Bill Perkins is one of the world’s most successful hedge fund managers and entrepreneurs, and the author of the bestseller, Die With Zero. In this episode, Bill unpacks the Die With Zero philosophy which challenges conventional thinking related to the balance between health, wealth, and time—the three variables important for fulfillment. Bill makes the case that we should strive for maximum net fulfillment rather than net worth (or even health). He argues that we need to optimize our life to have memorable experiences before it’s too late and that most people are over-saving and under-living. Bill also explains how one can apply the principles in Die With Zero to break out of “autopilot” and optimize their life to achieve maximum net fulfillment.
EARLY RETIREMENT
CAREERS
TECH & ECONOMY
- OpenIA founder: "we are going to operate as if AI risks are existential." (Sam Altman)
- ChatGPT and the Future of Investment Management (CFA Institute)
- Is ChatGPT a wealth manager killer? (ETF Stream)
- Frankenstien: A former developer shares how Google AI is making his fears ring true (Newsweek, Paywall)
- Machine Learning, AI & Automated Investment Stacks (Flirting With Models - 9 min)
James Clear, Atomic Habits — Mastering Habits, Growing an Email List to 2M+ People (2hrs)
James Clear (@JamesClear) is a writer and speaker focused on habits and continuous improvement. He is the author of the #1 New York Times bestseller Atomic Habits, which covers easy and proven ways to build good habits and break bad ones.
Travel
miscellaneous
Revisiting Japan's Lost Decade (Konichi-Value - 29 min)
Japan was on its way to surpass the United States as the world’s largest economy, and the supply of infinite growth and prosperity seemed non-stop. Then, the party suddenly stopped.The video & podcast is a detailed depiction of Japan’s lost decade (1991-2001): The tragic tale of the world’s largest economic bubble burst and its consequences.
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Weekend Reading – Asset Class Returns since 1970 & Trend Following Strategies
Cracking the Code: Decoding ETF Names & Discovering Tools To Find Them
Broker Review Methodology
iWeb Share Dealing Review – Great For Inactive Investors
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