Tag Archives: Most Recent Stories

Sorry for the radio silence recently. I went on my first vacation in two years over the Thanksgiving week. But now we’re back and getting ready for 2023. I was fortunate to sit down with Bill Brewster who runs the excellent Business Brew podcast. In this episode we talked about all things macro and why macro matters more than ever. My favorite part of the discussion was about the portfolio you need vs the portfolio you want. I am obviously a big believer in behavioral finance and...

In this video we discuss the collapse of FTX and the crypto markets and what we can learn from this bear market. This video includes: 1) Understanding volatilities relative to probable investment returns. 2) Learning to think in a first principles way. 3) Reducing or eliminating behavioral biases through systematic investment processes. I hope you enjoy it. [embedded content] Please follow and like us: About...

I’ve had three big investing epiphanies in my investing career. The first big epiphany was that macro matters much more than micro. The direction of the river is much more important than the strength of the swimmer. Anyone can float down a river, but trying to fight the current is often a losing battle. Back in the early 2000’s I used to run a stock picking strategy that unknowingly took advantage of the “overnight effect” in stocks. I generated very high returns during a period...

Here’s a new Three Minute Money video on the Triffin Dilemma and why it matters more than ever. The basic gist of the video is that the reserve currency issuer in the global monetary system has an inherent conflict. The rest of the world needs their currency not only for foreign trade, but for reserve maintenance and commerce since that currency operates as the safest and most widely used currency. But the reserve currency issuer also needs to be vigilant about currency issuance so as...

1) Is the bond bottom finally in? I’ve been surprised/wrong about how fast the Fed moved this year. And while I’ve been pretty negative about virtually all asset classes all year I’ve been surprised by how badly bonds have performed. That’s almost entirely a function of the Fed moving so fast, but it is what it is. I think they’re making a policy mistake and that they’ll be back at a 2-3% Fed Funds rate in the coming years, but we’re going to have to be patient while things play out....

The last few years have been jarring in numerous ways. They’ve also forced me to reconsider how I help people navigate the financial world. Here are some things I’ve recently changed my mind about. 1) Am I a Permabear? Someone on Twitter was trolling me for being too bearish this year. It’s true – I’ve been bearish all year in large part because my primary macro index, the Discipline Index, has been indicating an underweight stock position all year. It’s consistent with an environment...

Bond vigilantes reflect the idea that bond investors can attack a government debt market and dictate terms that the government wouldn’t otherwise desire. I’ve never liked this concept as I think it misconstrues the power dynamic at play in sovereign bond markets so let’s dig into this some more given the relevance in today’s high inflation environment. In a recent Three Minute Money video I explained how interest rates are set. The analogy I’ve always liked is a man walking a dog. The...

In this new episode of Three Minute Money I discuss some of the best options for investing cash right now. A lot of banks are still yieldiong 0% on deposits and the best high yield savings accounts are still only offering 3% or so, but if you are willing to do a little legwork you can get over 4% with no principal risk. I discuss some of the basics of how money market funds and savings accounts work and then offer a few options for how to maximize the return on your cash. In my...

Here’s my interview with Oliver Renick and TD from yesterday. I brought my sledge hammer with me to demonstrate how Fed policy is currently operating. I also go into detail about the current macro environment and the risks going forward. Specifically: This environment is transitioning from an interest rate risk environment to a credit risk environment. This means credit markets could reamin under duress as benchmark interest rates adjust higher and debt gets reassessed at these higher...

From Paul Fenner at The Emotional Balance Sheet Podcast: Am I providing my family with the best possible life I can? That was the question that Cullen Roche, an accomplished author, writer, and expert in global macroeconomics, behavioral finance, and monetary theory, brought to our attention during our conversation.We also discussed the topic of inflation, what it is, how to understand it, and where it is going.  Do you ever wonder why the US government is not bankrupt because of the...