Become a Better Investor Newsletter – 27 July 2024
Noteworthy this week
- Destined for a commodities rally
- House affordability in a 100-year uptrend
- McKinsey made up diversity benefits
- It’s easier to gamble than day trade
- Get some negative-yielding bonds
Destined for a commodities rally: According to the chart, commodities prices rose significantly in 1993-1997 as the Fed cut rates. Will the same thing happen when the Fed starts cutting this time, too?
Time to load up on #commodities?! pic.twitter.com/iUBnqsjIP9
— Ronnie Stoeferle (@RonStoeferle) July 1, 2024
House affordability in a 100-year uptrend: Since 1914, home affordability has been in a centuries-long uptrend. Was it because we abandoned the gold standard?
Going off the gold standard in 1914 stopped a centuries-long increase in affordability of homes by degrading the value of money, forcing people to use their homes as saving accounts, raising house prices beyond the rise in income pic.twitter.com/HgubMzOXxx
— Saifedean Ammous (@saifedean) June 30, 2024
McKinsey made up diversity benefits: In 2015, McKinsey declared that it had found a link between profits and executive racial and gender diversity. Since 2015, the approach has been tested in the fire of the marketplace and by academics, concluding that there is no link between profitability and executive diversity.
🤔
From WSJ:
“When management consulting firm McKinsey declared in 2015 that it had found a link between profits and executive racial and gender diversity, it was a breakthrough. The research was used by investors, lobbyists and regulators to push for more women and minority…
— Chamath Palihapitiya (@chamath) June 29, 2024
It’s easier to gamble than day trade: 13% of gamblers leave the casino a winner, while only 1% of day traders beat the market consistently.
I find this statistic remarkable each time I see it. What’s the point of trading? pic.twitter.com/XODGq54ObM
— Michael A. Arouet (@MichaelAArouet) June 29, 2024
Get some negative-yielding bonds: Not long ago, trillions of dollars went into negative-yielding bonds. It felt pretty sick then; I guess no one would do it now.
I will never understand why investors were buying Trillions of negative yielding bonds. Please take my money and guarantee me a loss? pic.twitter.com/5DIKKVeNOC
— Michael A. Arouet (@MichaelAArouet) July 2, 2024
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Weekly market performance
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Chart of the week
Discussed in the Become a Better Investor Community this week
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Podcasts we listened to this week
The Diary Of A CEO with Steven Bartlett – Robert Greene: How To Seduce Anyone, Build Confidence & Become Powerful
“How do you achieve success in the modern world? This is the billion dollar question. Some people would say that you must gain a whole new variety of skills and knowledge to keep up in our fast moving times. Only a few people would say you should use strategies that haven’t changed in thousands of years, as human nature and the game of power hasn’t changed either.”
Readings this week
THE SEVEN VIRTUES OF GREAT INVESTORS by Jason Zweig
“Last year, in my Wall Street Journal newsletter (and in my columns), I wrote a series about the essential attributes that all great investors seem to share.”
Book recommendation
Breakfast with Seneca: A Stoic Guide to the Art of Living by David R. Fideler
“In Breakfast with Seneca, philosopher David Fideler mines Seneca’s classic works in a series of focused chapters, clearly explaining Seneca’s ideas without oversimplifying them. Best enjoyed as a daily ritual, like an energizing cup of coffee, Seneca’s wisdom provides us with a steady stream of time-tested advice about the human condition—which, as it turns out, hasn’t changed much over the past two thousand years.”
Get the book on Audible or Kindle.
Audible is great; have you tried it? If not, click here to get 2 books for free.
Memes of the week
It’s time for The Great Resist.
Eat Real Food. pic.twitter.com/9wTEFYhoh6
— Declaration of Memes (@LibertyCappy) July 4, 2024
The last thing you see before receiving a $500k bill for a PowerPoint delivered by three 22 year olds telling you to increase revenue and reduce costs pic.twitter.com/4IeCLXQ0ZJ
— Dr. Parik Patel, BA, CFA, ACCA Esq. (@ParikPatelCFA) July 1, 2024
New My Worst Investment Ever episodes
ISMS 42: Emerging Markets Are Hurting, but Cheap
- Introducing emerging markets
- Our FVMR framework
- Fundamentals: Emerging markets are about 20% less profitable
- Valuation: Emerging markets are about 41% cheaper
- Asset class and region/country allocations
Access the episode’s show notes and resources
Ep788: Justus Hammer – Good Idea Versus Wrong Timing
BIO: Justus Hammer is the Group CEO and Co-founder of Mad Paws. Over the past two years, he has invested in over 45 startups. He has served as an advisor and early investor in Airtasker and a founding investor and advisor to VICE Golf.
STORY: Justus developed an idea to make real estate buying easier. He wanted to expand outside of Australia when COVID hit. Justus took a pause, thinking that the market would tank further. Instead, property prices doubled in the next 18 months.
LEARNING: What works in one asset class will not necessarily work in another. The real estate market dynamics are very different in each market. Timing matters, but you can never really know whether your timing is right until after.
Access the episode’s show notes and resources
Published on Become a Better Investor this week
In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. In this series, they discuss Chapter 06: Market Efficiency and the Case of Pete Rose.
Listen to Enrich Your Future 06: Market Efficiency and the Case of Pete Rose
TD SYNNEX Corporation (SNX US): Profitable Growth rank of 8 was same compared to the prior period’s 8th rank. This is below average performance compared to 640 large Info Tech companies worldwide.
Read TD SYNNEX Corp – World Class Benchmarking
China Resources Sanjiu Medical & Pharmaceutical Company Limited (000999 SZ): Profitable Growth rank of 4 was down compared to the prior period’s 3rd rank. This is above average performance compared to 380 large Health Care companies worldwide.
Read China Resources Sanjiu Medical & Pharmaceutical – World Class Benchmarking
PT Vale Indonesia Tbk (INCO IJ): Profitable Growth rank of 2 was up compared to the prior period’s 4th rank. This is World Class performance compared to 810 large Materials companies worldwide.
Read Vale Indonesia – World Class Benchmarking
Asian Sea Corporation Public Company Limited (ASIAN TB): Profitable Growth rank of 4 was up compared to the prior period’s 7th rank. This is above average performance compared to 420 medium Cons. Staples companies worldwide.
Read Asian Sea Corporation – World Class Benchmarking
DISCLAIMER: This content is for information purposes only. It is not intended to be investment advice. Readers should not consider statements made by the author(s) as formal recommendations and should consult their financial advisor before making any investment decisions. While the information provided is believed to be accurate, it may include errors or inaccuracies. The author(s) cannot be held liable for any actions taken as a result of reading this article.