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Become a Better Investor Newsletter – 22 February 2025

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Noteworthy this week

  • A looming Japanese debt crisis
  • US stocks at record outperformance
  • Stagflation fears rising
  • High margin for gold miners
  • There is no green energy

A looming Japanese debt crisis: Japan is sleepwalking into a sovereign debt crisis. Three decades of amassing debt might come to an end. Read the whole thread for some interesting perspectives.

US stocks at record outperformance: We’re currently witnessing the longest period of US equity outperformance relative to non-US stocks in history.

Stagflation fears rising: The fund manager survey shows that stagflation fears are again rising after a clear downtrend. Note also that the “boom” expectations have risen during the same period.

High margin for gold miners: Gold prices have surged far beyond production costs over the past few years, creating some of the strongest margins mining companies have seen.

There is no green energy: There are only energy sources that are “cleaner,” more sustainable,” or “greener” than others. Nuclear is probably the best on all those points.

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Weekly market performance

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Chart of the week

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Podcasts we listened to this week

Michael Mauboussin: The One Job of an Equity Investor – The Rational Reminder Podcast

“What if the key to successful investing is about understanding how market expectations, intangible assets, and even your own biases shape the outcome?”

Listen to the episode.

Readings this week

Probabilities and Payoffs: The Practicalities and Psychology of Expected Value

“In this report, we discuss some of the issues with the calculation of expected value, what the payoff picture means for investing, the implications of volatility drag, the psychology of dealing with probabilities and payoffs, and how these ideas can be helpful for investing in various asset classes.”

Download PDF.

Book recommendation

The Humble Investor: How to find a winning edge in a surprising world by Daniel Rasmussen

“Why just be contrarian when you can bet against consensus and be right? Through a meta-analysis of what moves markets and what drives human behavior, New York Times bestselling author and founder of Verdad Advisers, Daniel Rasmussen cuts through the 60/40 portfolio, exposing where empirical evidence shows the best opportunities—and where projections, models, and experts often fail—to create an asset allocation that can withstand the tests of time.”

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

New My Worst Investment Ever episodes

Ep798: Fabrizio Poli – When Passion Meets Poor Partnership

BIO: Fabrizio has always wanted to fly jets and has had a career flying both private jets and for various airlines worldwide. He has shared the cockpit with pilots from over 65 nationalities, giving him a broader perspective on people and life.

STORY: Fabrizio invested in a luxury car business in Italy but chose the wrong person to run the show, and because of this, he lost all his money and a very good friend.

LEARNING: Do not mix business with friendship. Hire the right people.

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 24: Why Do Smart People Do Dumb Things?

Listen to Enrich Your Future 24: Why Smart People Do Dumb Things

Bumi Armada Berhad (BAB MK): Profitable Growth rank of 4 was up compared to the prior period’s 6th rank. This is above average performance compared to 160 medium Energy companies worldwide.

Read Bumi Armada – World Class Benchmarking

Bangkok Expressway and Metro Public Company Limited (BEM TB): Profitable Growth rank of 6 was same compared to the prior period’s 6th rank. This is below average performance compared to 1,180 medium Industrials companies worldwide.

Read Bangkok Expressway and Metro – World Class Benchmarking

Centrica PLC (CAN LN): Profitable Growth rank of 4 was down compared to the prior period’s 3rd rank. This is above average performance compared to 300 large Utilities companies worldwide.

Read Centrica – World Class Benchmarking

Centurion Corporation Limited (CENT SP): Profitable Growth rank of 1 was same compared to the prior period’s 1st rank. This is World Class performance compared to 300 medium Real Estate companies worldwide.

Read Centurion 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.

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