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Pragmatic Capitalism

Practical Views on Money, Finance & Life

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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

Can you be a Fiduciary Without the Best Low Cost Options?

Here’s some blockbuster news from AdvisorHub: EXCLUSIVE: Morgan Stanley Purges Vanguard Mutual Funds Wow. A brokerage firm purges the largest low cost fund manager on Earth from their platform. That’s amazing. This is like the food court in your local mall purging pizza.  Which is a pretty good analogy for what a brokerage firm is… Read More

Can You Pick the Best Factors?

In the footnotes of my last post on factor investing I asked if I was being too skeptical: Maybe I’ve read too much Carl Sagan who once said: “If we are not able to ask skeptical questions, to interrogate those who tell us that something is true, to be skeptical of those in authority, then,… Read More