Friday , August 14 2020
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Tag Archives: Most Recent Stories

The Best of Pragcap in 2017

2017 was another year of learning and trying to spread that education to the readers here. I am so grateful for all the people who find the content here useful and provide feedback. With all the amazing sources of financial content out there I know most of you don’t have the time to keep up with everything I write so if I had to narrow this year’s content down to just 5 posts these would be the ones: The Biggest Myths in Investing – This was actually a series of 10 posts on big issues that...

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2017 Fixed Income Review – Bond Permabears Wrong Again

2017 is coming to a close and the largest, but least talked about market in the world had another outstanding year. Despite the never-ending predictions about rising rates and a bond bear market the bond market experienced another solid year of performance. Here are some performance figures for some of the more broadly held instruments: iShares Core US Aggregate Bond ETF (AGG) + 3.4% iShares Investment Grade Corp Bond ETF (LQD) +6.7% iShares 20+ Year Treasury Bond ETF (TLT) + 8.8% iShares...

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The State of the Trump Bubble

When all is said and done with the Trump Presidency I suspect we’ll remember the era as “The Trump Bubble”. As I outlined earlier this year and on election night last year, it just makes too much sense – big talking business man comes in and implements a bunch of business friendly policies all the while exaggerating the impacts and stoking a sense of (relatively) false positivity in the economy. Investors, already sitting on a massive 8 year bull market soak it all in, bid up prices more,...

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Will the Repeal of Net Neutrality Destroy the Internet?

The FCC voted to repeal net neutrality rules yesterday. That basically means that internet service providers have more control over the flow of internet traffic into your home. The worry here is that this means they might start charging customers more for usage. This is a complex debate, but I tend to think there’s a lot of overreaction on both sides. The crazy thing about the internet is that we’ve all kind of been spoiled by it. It was designed as a government program and basically...

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IDGAF > FOMO

Oh, you bought a Tesla? Oh, you bought a million dollar home?  Oh, you bought the new iPhone X? IDGAF. That stands for I Don’t Give A Fuck. Sorry to be crude, but sometimes you need a little emphasis when you’re expressing an important point. We’re now entering silly season in the markets. People are buying cryptocurrencies that no one understands and have very little actual utility. People are chasing stocks higher on a daily basis. Emerging market stocks, tech stocks and all the other...

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Elasticity of Money is a Feature, not a Bug

I am seeing a good deal of misunderstanding arise with the popularity of Bitcoin. Much of this seems to stem from a gold standard style of thinking. It can basically be boiled down to this: Government debt is bad. Banks are evil.¹ A fixed supply of money eliminates the ability of banks to be evil by expanding credit and doesn’t allow governments to issue debt as easily. Returning to the gold standard would fix these problems.² Since we’re not returning to the gold standard we’ll create...

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How Will The Bitcoin Mania End? Part Deux

This is Part 2 in my series on cryptocurrencies and how I think they’ll change the economy. In this post I will discuss why I think crypto will lead to a peer-to-peer economy.  In my last Bitcoin post I made a few big points: Bitcoin is the current reserve currency coin in the cryptocurrency space. Bitcoin’s lack of par settlement is a tremendous problem and potentially a fatal flaw. Blockchain tech and decentralized apps are bigly important and will transform many industries by cutting...

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Why Fed Narratives Can be Dangerous for your Portfolio

Over the course of my career I’ve endured endless Federal Reserve conspiracy theories. I’ve known people who stayed away from the stock market for the entirety of the last 20 years because they think the Fed caused the Nasdaq bubble, then inflated the housing bubble and then inflated the stock market with QE. But here’s the problem with that – this is mostly politics masquerading as pseudoscience. I’ve done a tremendous amount of work describing how the Federal Reserve works. The main goal...

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Beware the Parade of Annual Stock Market Forecasts

We all have to make forecasts when it comes to investing. But how we develop those forecasts can be the difference between high probability outcomes and low probability outcomes. For instance, take a 30 year bond yielding 2.75%. No one really knows where that bond will be in 1 year. But we know that it will yield 2.75% per year for the next 30 years. So this instrument is really unpredictable in the short-term and becomes more predictable in the long-term. Now, the same basic thing is true...

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