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Become a Better Investor Newsletter – 9 November 2024

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Noteworthy this week

  • Strategists can’t predict
  • Moo Deng predicted Trump’s victory
  • Politics knocks 10 IQ points off
  • Europe needs to spend on defense
  • Nvidia is no.1

Strategists can’t predict: At 5,929, the S&P 500 is now over 500 points above the highest 2024 year-end price target from Wall Street strategists and 22% above the average target (4,861). So, unless we see a big drop in the final two months, it looks like the strategists were far off.

Moo Deng predicted Trump’s victory: I guess everyone knows that Trump won the election, but you may not know that Moo Deng (the now-famous pygmy hippo) correctly predicted the election outcome.

Politics knocks 10 IQ points off: Unsurprisingly, political bias makes you stupider. When their own party is in power, people tend to think the economy is doing well, whereas when the opposing party is in power, they tend to think it’s doing badly.

Europe needs to spend on defense: Europe has underspent on defense for decades. With Trump as president, Europe will likely not rely as much on the US and will need to increase defense spending.

Nvidia is no.1: Nvidia jumps to an all-time high and is now valued at US$3.6trn, making it the world’s most valuable company before Apple at US$3.4trn.

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Weekly market performance

Click here to see more markets and periods.

Chart of the week

Discussed in the Become a Better Investor Community this week

“We just uploaded the performance review of our Global Asset Allocation Strategy. Review: Gold had another great month.”

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Podcasts we listened to this week

Stan Druckenmiller: Inside the mind of a legendary investor – In Good Company with Nicolai Tangen

“In this conversation, Druckenmiller shares his approach to major trades, like his groundbreaking bet against the British pound, and offers a unique perspective on today’s market, discussing inflation risks, AI’s potential in investing, and what keeps him ahead of the curve. The investor shares his reflections on the Fed’s role, the future of tech, and lessons learned from mentor George Soros.”

Listen on Apple or Spotify.

Readings this week

Low-Risk Alpha Without Low Beta

“We propose a risk-managed approach to capturing the low-volatility anomaly. Leveraging multifactor low-risk portfolios to a beta of 1.0 while controlling tracking error amplifies strategy returns and information ratios. Across developed and emerging markets, this levered low-risk strategy outperforms the market and traditional low-risk portfolios.”

Read the paper.

Book recommendation

Post Office by Charles Bukowski

“Post Office is an account of Bukowski alter-ego Henry Chinaski. It covers the period of Chinaski’s life from the mid-1950s to his resignation from the United States Postal Service in 1969, interrupted only by a brief hiatus during which he supported himself by gambling at horse races.”

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

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 18: Black Swans and Fat Tails.

Listen to Enrich Your Future 18: Build a Portfolio That Can Withstand the Black Swans

Is quality simply a matter of two categories: good and bad? But then how do you get to “better”? In this episode, Bill Bellows and Andrew Stotz discuss categories and continuum thinking.

Listen to Category and Continuum Thinking: Misunderstanding Quality (Part 6)

PharmaEssentia Corporation (6446 TT): Profitable Growth rank of 6 was up compared to the prior period’s 9th rank. This is below average performance compared to 350 medium Health Care companies worldwide.

Read PharmaEssentia – World Class Benchmarking

Jiangsu Hengrui Pharmaceuticals Company Limited (600276 SH): Profitable Growth rank of 2 was up compared to the prior period’s 3rd rank. This is World Class performance compared to 360 large Health Care companies worldwide.

Read Jiangsu Hengrui Pharmaceuticals – World Class Benchmarking

PT Kalbe Farma Tbk (KLBF IJ): Profitable Growth rank of 3 was same compared to the prior period’s 3rd rank. This is above average performance compared to 360 large Health Care companies worldwide.

Read Kalbe Farma – 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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