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Pragmatic Capitalism

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The Problem With Leverage in a Portfolio

Barry Ritholtz has a new article on Bloomberg discussing San Diego County’s firing of a risk parity firm that used to manage part of its pension.  Risk parity strategies often engage in using leverage.  Cliff Asness, who runs AQR, a firm implementing risk parity approaches (among others), hated Barry’s piece and called it “facile” “innuendo”.… Read More

3 Keys to Navigating a Low Return Environment

2015 has me wondering – is this a precursor to what the future could look like? That is, are the low returns across so many asset classes likely to be a sign of what’s to come?  In a BNN interview from this morning I laid out the case for why returns are likely to be… Read More

How Bad Has the Euro Really Been?

I have to admit that I’ve been a little bit shocked by how quickly people are concluding that the Euro needs to be scrapped entirely. I’ve been very critical of the Euro for the last 7 years here and I even said Greece should leave a long time ago (before their depression), but I’ve also… Read More

Ask Me Anything

Since the Q&A’s have always been so popular I am going to make an Ask Me Anything section a regular fixture on the site here. This will be a nice middle ground between having a comments section (which is too much work and trouble) and having no user commentary at all. I tried this once before with a… Read More

Charts That Make me go Hmmm

That Wall of Worry.  Here’s a chart from the latest Merrill Lynch Fund Managers Survey showing the number of asset mangers who have taken out protection against their portfolio. The Greek “crisis” appears to have put the fear of Lehman into asset managers because we’re now seeing higher levels of protection than there was during… Read More

Thoughts on the Hierarchy of Investor Needs

I really liked this post by Morgan Housel on the Hierarchy of Investor Needs. Morgan provides a very simple way of prioritizing the investment process. I’ve changed his hierarchy just a little bit and I wanted to quantify and expand on the process of prioritizing each: Let’s just take the Global Financial Asset Portfolio (the one… Read More

Hyperinflationary Lessons for Greece

There’s an economic battle occurring over whether Greece should leave the Euro or not. Economists on the left tend to say they should leave, bring back their old currency and go their own way. Economists on the right tend to say that Greece should stick it out and hang with the Euro.  I like to… Read More

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