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Pragmatic Capitalism

Practical Views on Money, Finance & Life

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In Defense of Vanguard

Here’s an article criticizing Vanguard. I guess we need to get used to this. As low fee indexing continues to eat the world the high fee alpha salesman are going to have to step up their game or they’ll all go out of business. But this “takedown” is particularly bad. Let me explain. The article… Read More

Why Do People Like Balanced Budgets?

Here’s a great question from Joe Weisenthal’s morning update: I’ve spilled a lot of ink over the last decade talking about debt, deficits and sectoral balances. My broader points have been largely proven right over that time: The US government does not operate like a household or business and operates with an inflation or currency… Read More

Why I am an Optimist

If you spend enough time managing money you learn that extremist views are extremely dangerous. Being a permabull is usually right in the long-term, but can expose you to getting crushed at times along the way. Being a permabear will look very right on rare occasions, but will crush you consistently in the long-term. And… Read More

The All or Nothing Bias

Have you ever done something where the outcome turns out much better than expected and you said to yourself “man, what if I had only bet more on that outcome?”  Of course this has happened to you because it’s happened to us all. Whether it was buying a single stock that did really well, placing… Read More

Let’s Talk About the VIX (Again)

I’m getting a lot of questions these days about the low volatility we’re seeing in the stock market. So, step into my office and crack open an ice cold Bud Light. Just kidding, I don’t give people Bud Light in my office. I give them Coors Light.¹ Anyhow, a few years back I said that… Read More

QE, Stock Buybacks and Other Stuff

Did QE work?  That remains one of the most common questions in finance and economics. My answer is simple – it depends! I know, that’s not a super helpful answer, but hang around and let me explain in more detail. I want to use a simple analogy to analyze how QE works and whether it… Read More

Let’s Talk About Expert Predictions

Come into my office ladies and gentleman. We need to have a discussion about a growing problem in the investment world – guru worship & putting expert predictions in perspective. Investing is hard. Really hard. In fact, the overwhelming majority of professionals and amateurs are bad at it. That’s why indexing is growing so fast.… Read More

Getting What You Need vs What You Want

I’m still hung up on the fiduciary standard because, according to my inbox, this is actually a controversial topic. So, let’s try this again. If I had to summarize the fiduciary problem in finance it would be this: Too many finance professionals sell people what they want rather than selling people what they need. When… Read More

Being a Fiduciary, Part Deux

Here’s Matt Levine on the Morgan Stanley decision that I wrote about yesterday: This is exactly right. Matt is just describing the world as it is today. Which is really the crux of the whole debate about the fiduciary rule. But that world is changing in large part because the salesman are forcing the stores… Read More

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