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Pragmatic Capitalism

Practical Views on Money, Finance & Life

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Trump is Wrong on the National Debt

macro

Donald Trump made some controversial comments the other day regarding the national debt. First, he said: “We’re paying a very low interest rate — what happens if that interest rate goes up 2, 3, 4 points?” he said. “We don’t have a country. We have tremendous debt, tremendous.” Second, he said: “I’ve borrowed knowing that… Read More

Why Does Indexing Shrink Alpha?

strategy

Jesse over at Philosophical Economics has written a couple of really fantastic posts (see here and here) on indexing and market efficiency.  His basic conclusions: The trend in passive investing is sustainable. The rise of passive indexing improves market efficiency. I’ve made the same points in a series of posts in recent months including: Passive… Read More

How Scared Should we be About Future Returns?

strategy

McKinsey had a really nice piece this week on the future of financial market returns. The basic conclusion – lower your expectations and hunker down for some lean years in the financial markets.  McKinsey says that equities have benefited from unusually favorable conditions in the last 30 years such as low valuations, falling inflation, falling… Read More

Three Things I Think I Think – Thinking Edition

macro

Please don’t kill me for the lack of creativity in that title. I was trying my best….Anyhow, here are some things I think I am thinking about:

1) Asset allocation and stock activism.
2) Endowment fund spending and portfolios.
3) Safe assets….

The Coming Catastrophe for High Fee Active Managers

strategy

Back in 2009 I wrote a very critical piece on mutual funds basically calling them antiquated products that do the American public a disservice.¹ My general message wasn’t to bash active management. After all, I agree with Rick Ferri here – there’s no such thing as passive investing. There are only degrees of active investing.… Read More

“There are no Good Gold Analysts”

strategy

Joe Weisenthal recently asked for a recommendation for a good gold analyst to interview on Bloomberg.  I said: @TheStalwart There are no good gold analysts. — Cullen Roche (@cullenroche) April 21, 2016 I was sort of kidding, but let me explain. Gold is one of the most interesting assets because it is viewed by many… Read More