Cullen Roche: Pragmatic Capitalism

Share the post "The Biggest Myths in Investing, Part 2 – The Stock Market Is Where You Get Rich"This is the second of a ten part series similar to what I did with “The Biggest Myths in Economics”. Many of these will be familiar to regular readers, but I hope to consolidate them when I am done to make for easier reading. I hope you enjoy and please don’t forget to use the forum for feedback, questions, angry ranting or adding myths that you think are important.Myth #2 – The Stock Market Is...

Share the post "The Biggest Myths in Investing, Part 1 – The “Investing” Myth"This is the first of a ten part series similar to what I did with “The Biggest Myths in Economics”. Many of these will be familiar to regular readers, but I hope to consolidate them when I am done to make for easier reading. I hope you enjoy and please don’t forget to use the forum for feedback, questions, angry ranting or adding myths that you think are important.Myth #1 – The “Investing” MythInvesting myth numero...

Share the post "Are Expectations Too High For Trump?"Back in early 2009 the public was euphoric about President Obama and the change he was ushering in. At the time I asked if expectations were too high:On the bright side, [Obama’s] entering office when things are downright awful, which likely means we’re closer to the bottom than the top.  But you still have to wonder, with such an enormous global economic mess, are expectations too high for President Obama?  Let’s just say, if I could...

Share the post "Paul Krugman is Right (For the Wrong Reasons)"Excuse me while I dust off my nerd suit and jump into an extremely dorky debate. I won’t criticise you for falling asleep half way into this article….  Paul Krugman has made a bunch of big league predictions over the last few years.¹ He predicted lower rates, low inflation, marginal impact from QE, insufficient stimulus, etc. These were, as he’s noted, important predictions as they were non-consensus and would have had huge...

Share the post "Passive Investors – Dumb Money or Smart Money?"Michael Maubboussin’s latest piece on passive investing is, predictably, awesome. Since this is one of the topics I’ve spent WAY too much time thinking about I wanted to expand on his thoughts and see if we can’t add some further clarification here because I still think this industry is making a bit of a mess out of this whole “active vs passive” thing.First things first. Because I am excessively anal retentive and detail...

Share the post "The Cash Freeze"Almost every week someone comes to me with the same story:“Hi Cullen, I am a wealthy older investor who has lived through two stock market bubbles and crashes and moved mostly to cash following the 2008 crash. I’ve been waiting for better prices all the way up and find myself frozen. Stocks look expensive and bonds scare me because of the potential for rising rates. I am frozen in cash and I don’t know what to do…HELP!”If that sounds familiar you’re not alone....

Share the post "The Top Research Papers of 2016"SSRN, the #1 research repository in the world, recently released their top research papers of 2016 and I was lucky enough to have TWO papers on the list. The first, of course, is my older paper “Understanding the Modern Monetary System” and the second is the paper I published in March of 2016 titled “Understanding Modern Portfolio Construction”. If you’ve already read those then have a look at a few of the others on the list. Jackson’s Game...

Share the post "Modern Finance is (Still) a Rip-Off"I’m going to tell you a secret that most of my industry doesn’t want you to know – modern finance is a rip-off. We call it “modern” finance, but the only thing that’s modern is the technological advancement. The fee structure remains antiquated. Yeah, it’s true – expense ratios and costs are falling rapidly. For instance, equity mutual funds have seen a 31% decline in their average expense ratio in the last 15 years.¹ But that has comprised...

Share the post "Don’t Get Trumped in 2017"The holiday parties are over and I’ve recently awoken from a white chocolate sugar cake induced coma to think back on the many investing discussions I always get bombarded with at this time of year. While I was attempting to win an award for mass carbohydrate consumption I was repeatedly interrupted by people who seem to think I am a financial “expert”. This conversation usually went like this:Random person: “Cullen, how about those markets this...

Share the post "The Best Value Vacations this Winter"My general view on foreign exchange is that no one can really predict the short-term movements of currencies.¹ They are zero sum games with fairly high frictions with so many moving parts that they’re virtually impossible to predict. So trading foreign exchange is usually a bad decision.  There’s one exception to this – foreign travel. And when it comes to foreign travel I don’t just rely on trading foreign exchange rates I do it almost...