What caught my eye this week.

The 1970s were a legendarily tough decade – for investors, for the UK economy, and for lovers of understated fashion. In his deep dives into the biggest equity swoons and bond market blow-ups, my co-blogger The Accumulator invariably showcases some horror story from the decade that time strives to forget.

Yet as parents and sports coaches alike counsel, it’s from the toughest times that we can draw the biggest lessons.

“High pressure makes diamonds” as people who fire themselves up in the mirror every morning before hitting the M25 like to say.

Which is all good reason to check out the extract from William Bernstein’s new book over on Humble Dollar this weekend.

Once more without feeling

In Courage Required, the veteran investing author reminds us that cheap markets aren’t so easily bought as they appear in hindsight.

Everyone thinks they will buy at the bottom. But in practice you’ll face both practical and psychological roadblocks.

Including Bernstein argues, human empathy:

Empathy […] at least financially, is one expensive emotion, since channeling the fear and greed of others often comes dear.

The corollary to human empathy is our evolutionarily derived tendency to imitate those around us, particularly if they all seem to be getting rich with tech stocks and cryptocurrency.

My own unscientific sampling of friends and colleagues suggests that the most empathetic tend to be the worst investors. Empathy is an extraordinarily difficult quality to self-assess, and it might be worthwhile to ask your most intimate and trusted family and friends where you fit on its scale.

To use a Yiddish word, the more of a mensch you are, the more likely you are to lose your critical faculties during a bubble and to lose your discipline during a bear market.

As somebody who has previously sold some possessions to buy more shares in the midst of bear markets, I’m not sure how to take this.

(Well, I guess I would take it personally, but my apparent lack of empathy protects me…)

Oh well, I’ve always known I think differently. And what equips one poorly for trouble-free dinner party conversation often seems me to be an advantage as an active investor.

Do read the full article over on Humble Dollar and consider getting the latest edition of Bernstein’s book – The Four Pillars of Investing – too.

(Or wait a bit. We might review it soon.)

Have a great weekend!

From Monevator

Which commodities ETF? – Monevator

Leveraged ETFs for the long run* – Monevator [Mogul members]

From the archive-ator: The index fund investor’s guide to avoiding financial hazards – Monevator


Note: Some links are Google search results – in PC/desktop view click through to read the article. Try privacy/incognito mode to avoid cookies. Consider subscribing to sites you visit a lot.

Ben Bernanke to lead review into Bank of England’s forecasting – B.O.E.

St James’s Place shares slump on Consumer Duty charge cap – Investment Week

Big lenders cut mortgage deals in sign rates may be peaking – Guardian

Number of households paying IHT jumps 17%; average bill £214,000 – This Is Money

Why productivity is so weak at UK companies [Search result]FT

Ovo under fire as hundreds of customers claim bills incorrect – This Is Money

How UK house prices left the middle class behind – Guardian

Products and services

Halifax offers an extra-speedy £150 bank account switching offer – This Is Money

Have children’s savings rates kept up with base rate rises? – Which

Transfer your SIPP to Interactive Investor in July and get from £100 to £3,000 in cashback, plus pay no SIPP fee for six months. Terms apply – Interactive Investor

“I’m secretly a Coutts customer but for people like me there’s no point”Guardian

Help to Buy mortgage meltdown forcing some homeowners to pay 9% interest – This Is Money

Five things to know about credit reports and credit scores – Which

Open an account with low-cost platform InvestEngine via our link and get £25 when you invest at least £100 (T&Cs apply. Capital at risk) – InvestEngine

ASDA boosts cashback offer on its credit cards. Is it any good? – Which

Victorian homes for sale, in pictures – Guardian

Comment and opinion

Another buy-to-let landlord skedaddles – Indeedably

The dark side of money – The Root of All

Wall Street’s market forecasts: all hat, no cattle – Fortunes & Frictions

The return on hassle spectrum – Of Dollars and Data

Why do thematic funds fail? – Behavioural Investment

Eight ways you can maximize the power of compounding – Finominal

Tips to avoid being scammed on social media – Humble Dollar

Are the markets stacked against the little guy? – A Wealth of Common Sense

Cullen Roche: is cash the best insurance asset? – Discipline Funds

The case for an indexing approach to managed futures [Nerdy]CAIA

Naughty corner: Active antics

The Nike story [Podcast]Acquired

Choosing a discount rate – Capital Gains

Don’t expect net income growth of US firms to continue to outrun fundamentals – Verdad

Professional investors are still so scared – Sentiment Trader

‘Disastrous’ SPACs and ‘painful’ IPOs wiped out years of gains – Institutional Investor

Kindle book bargains

Money Men by Dan McCrum [On the Wirecard fraud] – £2.99 on Kindle

The Ride of a Lifetime by Bob Iger – £0.99 on Kindle

How to Own the World by Andrew Craig – £0.99 on Kindle

Environmental factors

July 2023 is the hottest month ever recorded on Earth – Scientific American

When deep-sea miners come a-courting – Hakai Magazine

How farmers used California’s floods to revive underground aquifers – R.T.B.C.

ESG put to the test in a high-inflation world [Search result]FT

Gulf stream could collapse as early as 2025, study finds – Guardian

Robot overlord roundup

Investing in AI: navigating the hype – Sparkline Capital

Publishers want billions, not millions, from AI – Semafor

Meta’s open source Llama upsets the AI horse race – Wired

The Office repeats mini-special

Ghost town Canary Wharf – The Daily Mail

Don’t schedule meetings after 4pm – Vox

AI, remote work, and office demand – Dror Poleg

Why can’t we shake presenteeism? – BBC

Off our beat

The Comfort Crisis – Mr Money Mustache

How CIA agents begged a Hollywood actor to explain crypto – Rolling Stone

In praise of great lost products, from Cheese Moments to the Skip It – Guardian

The weird sorrow of losing Twitter – Vox

How to craft a good life [Podcast]Good Life Project

I hate the Hamptons – We’re Gonna Get The Bastards

Visiting death – Overcoming Bias [via Abnormal Returns]

And finally…

“Life is essentially an endless series of problems. The solution to one problem is merely the creation of another.”
– Mark Manson, The Subtle Art of Not Giving a F*ck

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The post Weekend reading: Inhuman investors appeared first on Monevator.

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