Pragmatic Capitalism

Practical Views on Money & Finance

‘Most Recent Stories’

Have the Robots Broken the Stock Market?

As more and more economic data comes out it is becoming clear that China really isn’t having much of an impact on the US economy.  Today’s initial jobless claims is about as real-time as it gets and they’re near all-time lows.  So now Monday’s flash crash is becoming an even hotter topic. Here’s my experience and… Read More

The USA’s Debt “Supercycle” Ended in 2007….

This note by Ray Dalio was going around the last few days explaining how the “debt supercycle” is nearing its end.  He says: “the risks of the world being at or near the end of its long-term debt cycle are significant.” Now, there’s no doubt that aggregate debt as a percentage of GDP has increased… Read More

Smart Beta, Dumb Money and EMH

Someone asked me about Smart Beta in the forum the other day and I got to thinking about this.  Indexers are all basically chasing some form of beta.  But some indexers chase beta in stupid ways and some indexers chase beta in smart ways. An increasingly common example of this is the many forms of factor… Read More

What’s Your Max Pain Point?

My biggest gripe with Modern Portfolio Theory is that it tends to lead investors into very stock heavy portfolios.  The thinking usually goes something like this: Stocks tend to go up over the long-term which means if you are somewhat young then you can afford to ride out the higher volatility of stocks and allocate your assets… Read More

The Cost of Getting Scared out of Stocks in 1998

We were late in the business and market cycle and the global economy looked shaky. Emerging market stocks cratered 40%.  Commodities fell over 25%. The dollar rallied over 20% against most major currencies. Asia looked liked it was falling apart.  No one knew what the impact would be in the USA and stocks seemed to… Read More