Become a Better Investor Newsletter – 6 January 2024
Noteworthy this week
- US politicians are amazing investors
- 2023 was great for Tech
- The yield curve has been inverted for 430+ days
- GDP growth driven by the budget deficit
- Ships avoid the Red Sea
US politicians are amazing investors: You may already have known that Nancy Pelosi is an amazing investor, but she only made 9th place among members of the US Congress in 2023. 30+ members of Congress beat the market. “Rules for thee, not for me.” – US Congress
🚨BREAKING🚨
I have just released the full report on politicians trading in 2023.
Like every year since 2020, US politicians beat the market.
And many in Congress made unusually timed trades resulting in huge gains.
Here are the top performers of 2023. pic.twitter.com/ykf9VICsBw
— unusual_whales (@unusual_whales) January 2, 2024
2023 was great for Tech: Tech-heavy Nasdaq 100 saw a massive rebound in 2023, but Bitcoin did even better. Volatility was awful, and commodities were slightly down.
2023 Total Returns…
Bitcoin $BTC: +152%
Nasdaq 100 $QQQ: +55%
S&P 500 $SPY: +26%
Developed ex-US $VEA: +18%
Small Caps $IWM: +17%
Gold $GLD: +13%
REITs $VNQ: +12%
Emerging Markets $IEMG: +12%
US Bonds $AGG: +6%
Cash $BIL: +5%
Commodities $DBC: -6%
Volatility $VXX: -72%— Charlie Bilello (@charliebilello) December 29, 2023
The yield curve has been inverted for 430+ days: The US yield curve (10-year minus 3-month) has been inverted for 430+ consecutive days, the 2nd longest streak in history.
The US Yield Curve (10-year minus 3-month) has now been inverted for 427 consecutive days, the 2nd longest streak in history. Will likely become the longest inversion ever in February 2024. pic.twitter.com/l1q7cVMwSx
— Charlie Bilello (@charliebilello) December 27, 2023
GDP growth driven by budget deficit: Is the economy really strong when the GDP growth is due to a gov’t budget deficit? It depends on the economic school you follow. But it’s hard to run deficits forever.
When people say that the economy is super strong, please understand…
We are running a HISTORIC deficit.
6.3% of GDP. Never seen before outside of WW2, the GFC or Covid.
If we weren’t running this deficit and balanced the budget, or even got close, GDP would be negative.
— Geiger Capital (@Geiger_Capital) January 3, 2024
Ships avoid the Red Sea: The Houthi rebels are still running wild in the Red Sea, which leads to longer shipping routes toward Europe and/or North America.
MAP OF THE DAY: Sometimes, a picture is worth a thousand words.
Container ships heading toward Europe and/or North America, with almost all avoiding the Red Sea (red).
More than two weeks after the launch of US-led ‘Prosperity Guardian’, the Houthis still rule in the Red Sea. pic.twitter.com/JK0oLMkvlA
— Javier Blas (@JavierBlas) January 3, 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
RWH038: THE $2.6 TRILLION MAN W/ RICK RIEDER
“In this rare, in-depth interview, William Green chats with super investor Rick Rieder, who oversees about $2.6 trillion at BlackRock, the world’s largest asset manager. Rick, who probably manages more money than any other investor on Earth, has an enormous range of responsibilities: he’s BlackRock’s chief investment officer of Global Fixed Income, head of the firm’s Global Allocation Investment Team, and chairman of the firm-wide BlackRock investment council. A true titan of the investing world, he recently won Morningstar’s 2023 award for Outstanding Portfolio Manager.”
Readings this week
The Temptation of Factor Timing
“The timing of equity factor premiums has a strong allure for investors because academic research has found that factor premiums are both time-varying and dependent on the economic cycle.”
Book recommendation
Freedom Evolves by Daniel C. Dennett
“Can there be freedom and free will in a deterministic world? Renowned philosopher Daniel Dennett emphatically answers “yes!” Using an array of provocative formulations, Dennett sets out to show how we alone among the animals have evolved minds that give us free will and morality.”
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
Night and day difference pic.twitter.com/7WUaRHeNqt
— Elon Musk (@elonmusk) December 30, 2023
When I die I want Jim Cramer to lower me into my grave so he can let me down one last time https://t.co/khjRPkYdfg
— greg (@greg16676935420) January 3, 2024
New My Worst Investment Ever episodes
Ep763: Gabe Marusca – Pay Extreme Attention to Your Body
BIO: Gabe Marusca, known as The Nomad Solopreneur, is a location-independent marketing strategist who established Digital Finest as a solo founder.
STORY: Gabe spent 20 hours working daily for over a year trying to make as much money as soon as he could. This caused his body to shut down, and he developed a chronic disease.
LEARNING: Pay extreme attention to your body. Having a long-term vision and patience is more sustainable than trying to gain fortune overnight. Stop putting too much time into the things that don’t matter.
Access the episode’s show notes and resources
Ep762: Giuseppe Grammatico – Pick the Medium That Works for You and Stick With It
BIO: Giuseppe Grammatico is a franchising advisor who has owned several Master Franchise licenses and has enjoyed a successful franchising career, guiding over 200 individuals through business ownership, many for the first time.
STORY: Giuseppe hired a full-service marketing company that managed everything from his website to emails and social media posts. Giuseppe gave the company complete control of his business, and his voice got lost. He also got virtually zero return from hiring the company.
LEARNING: Pick the medium that works for you and stick with it. Publicity doesn’t mean revenue.
Access the episode’s show notes and resources
Published on Become a Better Investor this week
Listening to understand and learn is often harder than not-really-listening because you’re thinking about what to say. Dr. Deming emphasized learning and was excited about ideas he heard from others every day. In this episode, David Langford and Andrew Stotz talk about why and how managers, including teachers, should listen to staff or students.
Listen to Do You Listen to Speak or Listen to Learn? Role of a Manager in Education (Part 12)
Ford Motor Company (F US): Profitable Growth rank of 8 was up compared to the prior period’s 9th rank. This is below average performance compared to 940 large Cons. Disc. companies worldwide.
Read Ford Motor – World Class Benchmarking
Volkswagen AG (VOW GR): Profitable Growth rank of 7 was same compared to the prior period’s 7th rank. This is below average performance compared to 940 large Cons. Disc. companies worldwide.
Read Volkswagen AG – World Class Benchmarking
Taiwan, Korea, India, Vietnam, Indonesia, and Philippines were the only markets with a positive return in 2023. Taiwan was the strongest performer in USD and local terms.
Read Taiwan Was the Best Performer in Asia in 2023
In December 2023, we published 9 new episodes of the My Worst Investment Ever podcast. Listen to all of them here.
Listen to My Worst Investment Ever December 2023
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.