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!
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
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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
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]
“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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