Friday , November 15 2019
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The author Cullen Roche
Cullen Roche
Former mail delivery boy turned multi-asset investment manager, author, Ironman & chicken farmer. Probably should have stayed with mail delivery....

Cullen Roche: Pragmatic Capitalism

Three Things I Think I Think – I’d Like to Report a Mass Murder

Here are some things I think I am thinking about today: 1) Hello, 9-1-1: I’d like to report a mass murder. Here’s a JP Morgan note that has been going around twitter the last 24 hours. I don’t have much to say here other than this – most of the people on this list have a few things in common – political bias and/or a permabear bias. So, don’t be biased or one day you might end up on a list like this getting carried out in a body bag. (Thoughts and prayers – image via @nickatfp) 2) Here’s...

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Let’s Talk About Sectoral Balances

I am a big fan of looking at things through the lens of the sectoral balances. For instance, I sometimes post this chart on this website which depicts the government’s balance vs the non-government. (This is a stupid chart without a lot more context) It’s a decent (though incomplete) depiction of the private sector’s balance versus the government’s position and it’s helpful to understand because, mainly, if you believe the private sector is too heavily indebted, then the government’s...

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Three Things I Think I Think – Has The World Gone Mad?

Here are some things I think I think about Ray Dalio’s provocative piece titled “The World Has Gone Mad and The System is Broken”. So…Ray Dalio wrote a short piece that is getting A LOT of attention. It basically implies that asset prices are insanely overvalued and the markets are due for a big “paradigm shift”. I think he makes some cognizant points, but I also don’t agree with the basis from which he makes some of these points. Let’s see if I can explain: 1) Are Central Banks “pushing...

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The Permaeverything Approach

I’m a permaeverything. Not a permabear. Not a permabull. A permaeverything. What the hell does that mean? It means I try to always maintain a relatively balanced exposure across my financial assets. I am never too heavily leveraged to stocks. Never too heavily leveraged to bonds. Never too heavily leveraged to cash. I am balanced. I am permanently bullish AND bearish about everything to some degree.  The Permaeverything mentality is essentially a type of Permanent Portfolio or All Weather...

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Three Things I Think I Think – The Nats Win!

Here are three things I think I think about the Nationals winning the World Series¹: 1) Patience. Prior to the 2019 MLB season the Nationals were 18/1 odds to win the World Series. It was always a long shot, but there was never doubt that this team was pretty good and arguably the best team in the National League East. After all, despite losing their superstar, Bryce Harper, they’d been wise in picking up Patrick Corbin and Anibal Sanchez and bolstering their main 2018 weak spot – starting...

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Three Things I Think I Think – This Might Make You Mad

Here are some things I think will make you mad to think about: 1) Did Adam Neumann deserve to make a billion dollars? I asked a controversial question on Twitter yesterday – did Adam Neumann, the recipient of a billion dollar payout from suffering WeWork, deserve to make a billion dollars while the company struggles? Some people were furious about this. I very much get the anger and I didn’t mean to make people mad. After all, I just want to make people happy by discussing reserve...

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No One Knows What Individual Stocks are Actually Worth

This is probably the most important thing you can learn about allocating your savings: No one really knows what individual firms are worth at any given time. When you recognize this fact you immediately step back from the constant media frenzy surrounding individual stocks. You recognize that it makes no sense to even try to have an opinion on individual stocks because they are so complex and unpredictable that trying to pick the winners and losers will inevitably result in excessive risk,...

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Three Things I Think I Think – What if it All Comes Crashing Down?

Here are some things I think I am thinking about: 1. Do you need gold if it all comes crashing down? The Dutch Central Bank stated that we would need gold to recapitalize the system in the case that it all comes crashing down. I’ve never understood this view to be honest. If the whole system comes crashing down you’re not gonna care about gold and recapitalizing the system. If this zombie apocalypse scenario unfolds my guess is you’ll be fighting (perhaps hand to hand) for resources. The...

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Three Things I Think I Think – Banning Billionaires and Other Stupid Ideas

Here are some things I think I am thinking about on this beautiful Wednesday before the Washington Nationals defeat the Los Angeles Dodgers¹: 1) Should we ban billionaires? Bernie Sanders says we should ban billionaires. It’s all part of the growing trend in the idea of wealth taxes that have become popular with some Democrats. It sounds like an okay-ish idea if you’re into progressive taxation, but it’s also an impractical idea that is predicated on misunderstandings. For instance, the...

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The Upside of Commission Free Trading

I hate short-termism and anything that feeds on it (financial news, get rich quick schemes, etc). It is, in my opinion, one of the most destructive aspects of any financial plan as it chews up taxes and fees thereby making the average investor more active and mathematically worse performing. Commission free trading feeds on this. It is essentially an incentive to trade more, as these trades, which are quite costly, are viewed as being cost-less. I bring this up as Schwab and Interactive...

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