Pragmatic Capitalism

Practical Views on Money & Finance

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Risk Management Always Matters

Many of the most intelligent investment thinkers out there today are in agreement that future returns for U.S. stocks and bonds will be subpar. This has been pointed out by many for a number of years now, but eventually it will happen.

Glenn Beck and Rand Paul Discuss the Fed…

Rand Paul joined Glenn Beck today to discuss the Fed and some of the attacks on his “audit the Fed” bill (see here for the transcript and the video). This is a good learning experience so bear with me for a few minutes as I explain some of my thinking here and why I’ve been critical… Read More

Why Do Economists Think They’re Economic Experts?

What would you say if I told you economists don’t actually understand how many of the most important entities in the economy work? That would be a pretty damning criticism of anyone who purports to be an “expert” on the economy, right? I write this on the heels of the recent uproar by economists and… Read More

The History of the Global Equity Portfolio

One of the nice things about thinking of the world in macro terms is that you are less inclined to fall victim to a fallacy of composition. That is, in the financial world we tend not to think in terms of aggregates so we often extrapolate personal or localized experiences into broader concepts which often… Read More

Policy Decisions Are Always Discretionary

Over the last few years I’ve really started to stress an important point in my financial work – the fact that all investment decisions are active even if they are made infrequently or automatically. That is, when anyone deviates from the global cap weighted portfolio they are making active decisions. Likewise, when you automate your… Read More

Negative Volatility in Long Bonds Surges

Negative volatility in long bonds is spiking to unusual levels. As I noted last month and then again recently, this has become a real risk in diversified portfolios because bonds should provide you with protection against permanent loss risk. However, when the deflationary beliefs became almost universally acknowledged in the last few months the long bond… Read More