Pragmatic Capitalism

Practical Views on Money, Finance & Life

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The Pitfalls of the Passive Investing Marketing Pitch


Here’s a crazy headline from Reuters this morning: Largest exodus in five years hits U.S.-based stock mutual funds: ICI This is what most people will describe as the migration from “active” to “passive”. In other words, index funds are taking the place of more active stock picking funds. Of course, regular readers know there’s no such thing as… Read More

Three Things I Think I Think – Weekend Edition


Here are some things I think I am thinking about: 1 – The Department of Labor’s Fiduciary Rule is Already Working. There was a bit of an uproar this week when Skybridge Capital’s Anthony Scaramucci said that Donald Trump would repeal the Department of Labor’s new fiduciary rule arguing that it’s nothing more than another onerous… Read More

The Biggest Risk of a Clinton Presidency


Hillary Clinton will be a one term President. The reason I say this is because I suspect that her economic plan will not be very stimulative and I think that four more years of weak economic growth will be intolerable. And the main driver of my thinking here is deeply rooted in Bill Clinton’s presidency. Back… Read More

How the GOP Lost A Slam Dunk Election


As Donald Trump’s poll numbers crash to Earth the autopsy team is starting to assemble to assess what exactly went so wrong with the 2016 election process. How did a slam dunk election turn into such a catastrophic loss for the GOP? And yes, this should have been a slam dunk. In a world of… Read More

Do the Financial Markets Prefer Clinton or Trump?


I recently got an email from someone who said they were going to sell all of their stocks until after the election was settled. They think that Clinton will win and that her “tax and spend” policies will cause interest rates to skyrocket which will crash the stock market. He says he will then “reinvest… Read More

Three Reasons I Bought a New Home


If I’ve seemed unusually busy in the last 6 weeks there’s a good excuse for that – we bought a new house. Our first house, actually. As a Southern Californian I’ve never been convinced by the financial benefits of owning a house. After all, buy/rent comps in this area tend to be similar to those of… Read More

Chart of the Day: Golden Era of Low and Stable Growth


One of the dominant themes in economics these days is that low growth means we are worse off. Some people call this “secular stagnation” or something similar. I’ve challenged this view and say this doesn’t account for how stable our economy has become. In other words, it doesn’t adjust for the risks we face. You see,… Read More

Do Trump’s Taxes Matter?


The release of a 1995 Donald Trump tax return could become the turning point of the 2016 Presidential Election.  But how much does this really matter?  Let’s do some Q&A on the topic just for fun.  I’ll pretend to be an unbiased observer and we’ll let an equally unbiased observer, say, Vladimir Putin, interview me.  Here’s… Read More

Bull Markets are the Hardest Part


There are two difficult times to be an investor – when the market goes up and when it goes down.¹ We all know the difficulty of the bear market. It usually works something like this: We think markets will go up for some reason. Markets go down. Markets go down a lot more than we’re comfortable… Read More