Cullen Roche: Pragmatic Capitalism

Here are some things I think I am thinking about: 1) Holy lumber, batman! Have you checked out lumber prices lately? Prices have TRIPLED since the March bottom. It’s one of the most interesting economic developments since the pandemic started. Basically, people started staying home and realizing they wanted to remodel the house. Other people started moving out of big cities driving demand for new construction. Young home buyers tried to pounce on the economic weakness. Lumber mills got...

Here are some things I think I am thinking about: 1) Moar Home Owners? There was a funny (and serious) Tweet going around in recent days. This made me laugh.¹ Homeownership is massively overrated. I used to rent. I miss it all the time. Don’t get me wrong. I love my house. I bought this old beat up house near the beach and I basically drove a bulldozer through it (which was amazing) and then I spent much of the last 3 years building it myself. It’s been fun, educational and truly horrible...

You’re not gonna believe this, but I recorded a Podcast recently. But trust me, this one is really good. I joined Stig Brodersen and Preston Pysh on The Investor’s Podcast. They always ask the best questions and deep dive into topics in a very educational and informational way. In this one we covered the whole gamut of financial topics including: The main advantage of centralized currencies Why the risk of inflation is more likely to come from the Treasury than from the Federal Reserve...

Here are some things I think I am thinking about…there are a lot of bad tweets these days. Come to think of it, maybe all tweets are bad tweets. But on the scale from bad tweet to very bad tweets these were some that triggered me this week: 1) 401Ks are actually very good. There was this article in Bloomberg arguing that the 401K is no longer a good retirement vehicle. Seemed like click-bait, but then I started reading it and the numbers were somewhat compelling. The author had really put...

I know. It’s getting to be a bit much. But I did another podcast. What the hell else am I gonna do on lockdown? Anyhow, I joined Dan Ferris on The Investor Hour to talk about the financial markets. Some of the topics included: The impact of the stimulus and the state of the markets. Why Fed Trutherism is dangerous. Why the stock market rally makes more sense than people think. How the Fed influences interest rates. Why future returns could be lower than many expect. Why patience is going...

I turn 40 years old today. Since I hate birthday presents I figured I’d pass along some of the presents people have taught me over the last 40 years.  1) Always try to be a good person. This is the most obvious one and also often the hardest one. Life is hard and everyone is fighting their own personal battles. Help them through it by being kind enough to try to understand their battle. 2) Never mistake money for wealth. The person who mistakes money for wealth will live a life...

Here are some things I think I am thinking about. 1) The Mask Controversy.  I manage risk for a living. It’s something I obsess about every minute of every day. Understanding risk helps you optimize risk and reward by understanding when things have an asymmetric payoff. We all want to do things that have a high payoff and low amount of risk. COVID is obviously a very high risk virus. We don’t know exactly how to stop the transmission of the virus, but it is becoming clear that mask wearing...

Here are some things I think I am thinking about. 1) Are the markets losing their minds?  I’ve tried my best to caution people in recent months over the excessive pessimism of the permabears. There have been numerous comparisons from the usual suspects about how this was the next Great Depression and how the next financial crisis was right around the corner. As I noted in April and is now becoming clear this was very wrong. But there’s still a long road ahead and I somewhat sympathize with...

(Sorry for the radio silence here. It’s been a crazy couple of weeks between this whole new dad thing, the global pandemic, running a business, STILL building my house and eating my way through the lockdown.  Hopefully life starts to normalize a bit now and I can find more time for writing!)  I always describe the stock market as a temporal conundrum. What I mean by that is that the stock market is basically a perpetual instrument whose future cash flows are unknown so its price movements...

I did some podcasts recently that I think you might enjoy. Or you might hate them. I guess it depends. But I figured you might want to give them a listen in any case. The Alpha Trader Podcast – I joined Aaron Task and Stephen Alpher to discuss the current state of the financial markets including: Why the recent rally makes more sense than some people seem to think. Why this isn’t the next Great Depression. Why value stocks might finally become more attractive. The risk of future...