Categories

Pragmatic Capitalism

Practical Views on Money & Finance

‘How To’

The “Allocation Matters Most Hypothesis”

My latest post on “passive” indexing made some people upset.  I have argued, in essence, that there is no such thing as “passive” investing and that most people who use the term don’t really understand that what they’re doing is actually quite active and forecast based.  These are not “strawman” comments or misunderstandings as some… Read More

Understanding Your Real, Real Returns

Thornburg Funds has a new report out on understanding your real, real returns and it’s fantastic.  I discuss this topic in detail in my book, but they do a much better job covering this than I do.  So go have a read. The chart below is super important.  Most people who get into investing think only of their nominal… Read More

This Commonly Referenced USD Purchasing Power Chart is Useless

You’ve almost certainly seen the chart below over the years – it shows the purchasing power of the US Dollar over time.  It looks terrifying.  And it’s constantly cited by hyperinflationists and other people trying to convince you that the world is quickly coming to an end thanks to the “fiat monetary system” and all the… Read More

What Backs the Value of Money?

I was reading this very good piece by Matthew Klein at FT Alphaville when I came across this line: “The only kinds of money that reliably hold their value are the ones explicitly backed by a strong government*.” This is an interesting point and one I don’t completely agree with.  I go into this in… Read More

More Thoughts on the CAPE and Valulations

I’ve made my opinion on valuations and the use of CAPE pretty clear – these sorts of metrics don’t tell us much about the macro environment because the whole idea of ” value” is dynamic and evolving.  If I am right then trying to calculate a market “value” through these types of metrics is likely to… Read More