Pragmatic Capitalism

Practical Views on Money & Finance

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The New Narrative Fails of the Investment Industry

The landscape has shifted in the investment industry in the last 10 years as indexing has become more popular and costs are increasingly scrutinized. And the industry narrative has evolved with it. Unfortunately, the same underlying problems largely still exist.  Let’s explore some of the new narratives. 1)  We believe costs matter so we use… Read More

Things People Say During a Bull Market

Here are some things you’ve probably been hearing during the current bull market from a wide range of investors including some tongue-in-cheek translations about what they really mean.

Free Markets Over Morals

Capitalism isn’t an inherently negative economic system. Like most systems, it is only as negative or positive as its users allow it to be. If capitalists are greedy and evil then capitalism will appear greedy and evil. If capitalists are giving and good then capitalism will appear giving and good.  I like to say that capitalists serve… Read More

What if There Are no Reliable Factors?

I’ve always been bothered by the notion of “factor investing”. In case you don’t know, factor investing is derived from Eugene Fama’s various factor models (which have expanded over time to account for increasing inconsistencies in the Efficient Market Hypothesis). Fama started with 1 factor to explain the market’s movements, expanded it to 3, then… Read More

Which is it Paul: Natural Rate or Not? (Nerdy)

This will only interest the super nerds in the audience, but Roger Farmer has a great post up in which he discusses the idea of multiple equilibria in the economy and the underlying models at work. Roger is talking about how the economy doesn’t have a single equilibria, but instead shifts into differing equilibria at… Read More