Here you will be able to find communications from the RIM team as well as helpful resources and articles.
It’s been said that diversification is the only free lunch on Wall Street.Everyone, from investment professionals to lay people, knows that diversification is prudent and is investment best-practice. On the other hand, there are some people who have ignored the principle of diversification and done extremely well. There are some advantages to concentration instead of diversification.
This fun read was Richard Thaler’s account of his both his own journey and how behavioral economics started as a fringe movement and ended up being widely accepted as more explanatory of how decisions are made in the real world than classical economics.
The most up to date national home value information I found goes through April, and shows a long steep rise in home prices, followed by an inflection even steeper. This is consistent with the bubble paradigm where investment bubbles have steady increases in value culminating in a “blow off top” where greed and fear of missing out takes over to push values to unreasonable levels. I do not know whether houses are in a bubble, but the evidence, including this chart, point to that conclusion.
Quarterly letter with Market update, Personal update, Business update, Personal improvement and book review.
There were two big issues last quarter that captured investors’ attention. The first was interest rates. The second issue that has rightfully held investors’ interest is geopolitics. Sentiment has moved around over the last several quarters. It now has shifted to convinced optimism. Very few people are expecting a recession now, and some have already begun their victory dance, complete with taunting the naysayers.
Stock market valuations have clearly been rising since early 1982. In fact, investors now pay over five times as much as in 1982 for a dollar of cyclically adjusted earnings, and 11% more than in 1929, when economist Irving Fisher declared, “stock prices have reached ‘what looks like a permanently high plateau.’” Indeed. Nearly a century later, have we finally entered a “permanently high plateau”? Are fat pills and algorithms able to do what online commerce and cat videos couldn’t? Readers must make up their own minds. The data hasn’t supported this yet, but investing is all about looking forward. As you do, I hope you look forward to my next article on what current valuations mean for future returns.