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Pragmatic Capitalism

Practical Views on Money & Finance

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Someone is Always Outperforming Your Portfolio

I have some bad news for you. Someone, somewhere has a portfolio that is doing better than yours is. It might be Warren Buffett or your neighbor or your worst enemy (the latter two are often the same thing). The thing is, when we put together portfolios we have to remember a few hard truths… Read More

A Little Asset Price Inflation is a Good Thing

Any time I write a story about inflation I inevitably get lots of responses about asset price inflation. For some reason this is always implied as a bad thing. But asset price inflation is not necessarily bad. In fact, a little asset price inflation is a good thing. If we look at this from a… Read More

Lowflation Update

It looks like the flation debate has been won, resoundingly, by anyone who thought that QE and record high government deficits would not be inflationary.  In fact, it’s been won so resoundingly that you can’t even call this INflation any longer. When we look around the world the term INflation is misleading since so many… Read More

Is it Impossible to Predict the Future?

Barry Ritholtz has a very good piece on Bloomberg today about investing lessons and March Madness. I doubt Barry and I are terribly far apart on this issue, but I did want to touch on one topic – predicting the future.  Barry writes: Predicting the future is impossible: The defeat of several favorites, most notably… Read More

Ramifications of the Fed’s Portfolio Exit

While raising interest rates seems to be on everyone’s minds these days, there’s a far more important policy tool that could be on the table – asset runoff. One of the key impacts of QE is the portfolio rebalancing effect. This occurs as a result of the Fed’s removal of bonds from the private sector. This change… Read More