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Pragmatic Capitalism

Capital for Living a More Practical Life

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3 Things I’ve Learned Since the Financial Crisis

The great thing about financial panics is that they teach you a lot about yourself and test the boundaries of existing thought which exposes the world to yearn for new understandings. The Great Financial Crisis was one of the most educational periods in finance and economics in modern times.  But it’s funny to look back on… Read More

Why is US Economic Growth Slowing?

I read a common narrative these days about how the US economy is slowing because it’s weakening, becoming less dynamic and less productive. I’ve countered some of this over time by arguing that yes, we’re slowing, but we’re just normalizing and actually stabilizing (in other words, the idea of “secular stagnation” is another case of short-termism).… Read More

Factor Picking is the New Sector Picking

One of the main points I always make during my active vs passive rants is that asset picking is becoming the new stock picking. You see, it used to be that alpha chasing active managers would pick stocks. The sales pitch was “I have a unique talent that will allow me to pick the best… Read More

The Right Way to Use Economics as an Investing Tool

The guys at Ritholtz Wealth knocked the ball out of the park with the Evidence Based Investing conference in Dana Point this year. Yesterday’s warm-up was Michael Mauboussin, followed by Rob Arnott who was followed by Jeff Gundlach.  Inbetween all that amazingness was a set of incredible panels. I wish I could summarize it all.… Read More

Are Index Funds Risky for Corporate Governance?

Here’s a provocative piece in today’s WSJ about index funds and how they are bad for corporate governance. This is one of many articles in a long line of attacks on index funds in recent years. The other arguments, generally trotted out by high fee active managers getting crushed by the rise of indexing, aren’t… Read More

Walk it Back, Random Walker

Big news, nerds – Burton Malkiel has changed his mind.  The investment legend, who has spent his entire life chastising alpha chasing active management, has moved over to the dark side. Malkiel, the Chief Investment Officer at Wealthfront has rolled out a new strategy that they’re calling “Passive Plus” indexing. The strategy is another name… Read More