One of the more common investing myths is the idea that indexing is necessarily “average”.¹ It makes sense at first. If you bought all of the stocks in the market [ … ]
Category: Myth Busting
(Popular Myths of the Economy and Markets….BUSTED!
Indexing is the Result of Homogeneous Markets, not the Cause
As indexing strategies gain in popularity I am seeing a common selling point from active stock picking fund managers – the idea that more indexing creates more opportunity for active managers. [ … ]
Trump is Wrong on the National Debt
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 [ … ]
The Myth of Declining American Living Standards
One of the running themes of this website over the last 6 years is the idea that the US economy is not doing nearly as well as it should be, [ … ]
Myth Busting: Stock Buybacks aren’t Propping up the Stock Market
There has been a good deal of concern about stock buybacks in recent years ranging from concerns that buybacks are a poor allocation of resources to the idea that buybacks [ … ]
Passive Investing isn’t Hurting the Economy
The new sales pitch for the high fee active manager goes something like this: “passive investing has gotten so large that this creates greater opportunities for us to take advantage [ … ]
Why Equity Outperforms Credit
In my new paper on asset allocation I go into quite a bit of detail about why certain asset classes generate the returns they do. Understanding this is useful when [ … ]
Is Indexing Just Another Wall Street Fad?
Here’s an interesting comment from value investor Seth Klarman on the rise of indexing (this is from 1991!): Klarman is obviously biased because he’s in the business of selling a [ … ]
Let’s Talk About the US Government’s Interest Burden
Greg Ip had a piece in the Wall Street Journal yesterday discussing the debt burden in the USA and how low interest rates have “moved back” the “hands on the doomsday [ … ]