Wealth through Investing

Weekend Reads for Investors: Pyramid Edition


It is hard to provide anything insightful when no matter what happens news-wise, the equity markets continue to ascend.

An anecdote may prove useful: Several years back, I authored a story about “Top Anecdotal Signs of a Market Bubble.” One indication you’re in bubble territory: When laypeople are talking about buying a complex investment just because its price is going up. I was in a bookstore and overheard the clerk explaining bitcoin and what was so special about it to a customer. I am also hearing more non-pros talking about financial markets. To me, it seems frothy —  a bit like a pyramid scheme.


I believe we are living in a post-nation state world, one in which that other paradigm of the 20th century is also being altered, probably permanently. Yes, I’m talking about capitalism. I think we are entering a post-capitalism period. I know, I know — you may be wondering why I say that. “Is he mad?” “Is he a communist?” No, but capitalism depends on capital being scarce. It is hard to say that condition is met today. Witness the performance of just about any kind of market, really. In any case, our consumption model of “growing” the economy needs to change if capitalism is to evolve. (NewCo Shift)

One possible storm cloud on the horizon — though, it has been discussed endlessly, and for many years — is the <cue dramatic music> oncoming pension crisis! Let’s check in on the all-important demographics: People in the United States are retiring later, dying sooner, and are sicker in between. Also, what exactly is “plan failure“? This term is bandied about a lot, but what does it really mean? This fascinating piece came to me courtesy of Rebecca Fender, CFA, our Future of Finance head. (Thanks, Rebecca!) (Bloomberg, Wealth Management)

I hope that by now you have read “Future State of the Investment Profession.” In it, we discuss the inevitable march of fees “down into the ground/To get out of the rain.” Frankly, funds and their fees need to change if we are going to keep our investor base happy for longer. For starters, let’s make fees performance-based, shall we? The preceding piece discusses whether that will make a whit of difference. You know why? Not only is fintech coming on fast, so, too, is non-traditional competition. Hello Alibaba! Hello Amazon! Wall Street could be next to be Amazon’d. (South China Morning Post, Business Insider)

If you read either my Alpha Wounds or Active Equity Renaissance series, you know that I think Morningstar’s style box is a disaster for our industry. In fact, I would say that fund adjuncts like them receive too easy a pass from our community. That is why this research demonstrating that their famous star ratings are not predictive of future returns is a much-needed reality check. (Enterprising InvestorWall Street Journal)

Last in this category, and a legit candidate for Story of the Year, is news that China and Russia are considering linking their currencies together. If this is so, what’s their end goal? I think it’s probably to disable the petrodollar — that huge and longstanding advantage the United States has over the rest of the world: If you are going to import oil, then you must settle your trade in US dollars. This has created too cushy a cushion underneath the greenback for the past 45 years. If I were China and Russia and wanted to compete with the United States, this would be one of my starting points, too. (Business Insider)


This old-timer refuses to create a special Fintech section for his blog post. Why? Because fintech is just the latest tech du jour. Even a new shortcut home from work qualifies as technology. We don’t need a shinier, sexier special category for innovation. With that curmudgeonliness out of the way, let me point out the power of blockchain, both kinds of blockchain — that is, its two preeminent functions: as alt-transnational currency and distributed ledger. Indeed, the ledger may bury the traditional firm. (Imperial College Business School)

I am a critic of the overhyped artificial intelligence (AI)/machine learning bubblenaut. Why? For many reasons, but one is because it is still super reliant on traditional data. This is why Watson has not developed a cure for cancer, yet. (Financial Revolutionist)

While on the subject of schemus pyramidus, I believe that the conversation on how to improve computer technology is a permanently important one. Consequently, might I suggest a “Reboot for the AI Revolution“? (Nature)

Environmental, Social, and Governance (ESG)

It seems an obvious point that every time a climate disaster strikes, we all get poorer. However, there is an idiot school of economics that believes otherwise. This piece sets out to debunk the bunk and echoes an argument I made earlier this year. (New Scientist)

Last on the (not good) news front: Oceans were colder in the past than we thought. This means climate models are likely underestimating the real warming of the planet. (R&D Magazine)

Fun Stuff

To me, this was more fun than all of this year’s fun pieces combined: the discovery of a gigantic hollow in the Most Interesting Building in the World, the Horizon of Khufu. You probably know it better as the Great Pyramid of Giza.

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All posts are the opinion of the author. As such, they should not be construed as investment advice, nor do the opinions expressed necessarily reflect the views of CFA Institute or the author’s employer.

Image credit: ©Getty Images/JimPix

Jason Voss, CFA

Jason Voss, CFA, tirelessly focuses on improving the ability of investors to better serve end clients. He is the author of the Foreword Reviews Business Book of the Year Finalist, The Intuitive Investor and the CEO of Active Investment Management (AIM) Consulting. Previously, he was a portfolio manager at Davis Selected Advisers, L.P., where he co-managed the Davis Appreciation and Income Fund to noteworthy returns. Voss holds a BA in economics and an MBA in finance and accounting from the University of Colorado.

Ethics Statement

My statement of ethics is very simple, really: I treat others as I would like to be treated. In my opinion, all systems of ethics distill to this simple statement. If you believe I have deviated from this standard, I would love to hear from you: [email protected]


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