Excess Returns | SignalBridge Wealth https://xitter.cf/t.co/Qc8NFhmhkP
Fairfield, CT
Joined August 2017
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This was so much fun.
@CliffordAsness joins @CultishCreative and me on @excessreturnpod to walk through the greatest hits of his research.
We covered:
• Bubble Logic and what investors still get wrong about bubbles
• Why volatility is a useful measure of risk
• The myth of “cash on the sidelines”
• How private markets hide volatility
• Why missing the best (and worst) 10 days is a bad argument
• The case for international diversification
• When to pull the goalie in hockey
• Machine learning, overfitting and the future of quant investing
bit.ly/4wLUk00
Jack Forehand retweeted
You do not have to be first to an investing idea. Being too late can be the bigger problem.
When "your cousin who's got nothing to do with finance calls you up asking about it," it might be time to move on.
Tian Yang on narratives as an S-curve.
Jack Forehand retweeted
"We assume that when they cut rates, the market will go up."
Stocks can keep falling after the Fed starts cutting rates.
Jim Paulsen on why the reason rates fall can matter more than the cut itself.
Jack Forehand retweeted
A European listing doesn't mean a European business.
"You're buying companies with baskets of exposure to different economies around the world."
Colin McQueen on why where a company trades and what drives its value are different questions, and why ETF and index flows that move global businesses together can create a mismatch.
Jack Forehand retweeted
Even 30% year-over-year earnings growth can disappoint investors.
"We can continue to grow, but if we're growing at a lower rate, that's when markets are gonna reprice."
Paisley Nardini on why a growing business can still be a disappointing investment when its price assumes an even faster trajectory.
Jack Forehand retweeted
"If a manager oozes confidence, you should run a mile."
"You look for knowledge with a high dose of humility and uncertainty."
"We like people who exude confidence, but you want the opposite in a money manager."
"You want the one that says, ‘I’m not sure,’ as they’re gonna act in a way that reflects the uncertain outcomes that we all face in investment and in life."
Graeme Forster on the one lesson he would teach the average investor.
Jack Forehand retweeted
"Be careful who you're following, and do your own work."
Ian Cassel tells the story of the Judas goat, then turns it into a warning about investors who need you to buy what they already own.
A confident pitch is not a substitute for your own research.
Jack Forehand retweeted
The Nasdaq fell 4.5% this week. A concentrated portfolio can leave you exposed to risks that knowing a business well cannot eliminate.
"It's hubris to think that you pick the five best companies in the market."
Revisiting Aswath Damodaran's case for diversification, even when you believe a stock is undervalued.
Jack Forehand retweeted
"You can't just read research reports and believe that other people are going to invest for you."
Michael Baron connects curiosity and doing your own work to the conviction needed to hold a business through difficult periods.
Borrowing a stock idea is easier than borrowing the confidence to stay with it.
Jack Forehand retweeted
What if AI ends up with several providers and customers can switch easily?
"The value of that tool is gonna go to the users of it rather than the builders of it."
Chris Davis on the difference between creating enormous value and having the pricing power to keep it.
Jack Forehand retweeted
"In the last 20 years, if you bought tech stocks, you outperformed on a year-over-year basis 80% of the time."
"I just think we're comfortable."
After two decades of buying the dip, Jim Paulsen on why the risk is that crowded investors all try to change course together.
Jack Forehand retweeted
"Are you just not willing to throw the towel in and admit it yet?"
Colin McQueen uses AI to challenge investment theses he may be too stubborn to abandon.
It is still an experiment. The aim is a dissenting voice, not another tool that agrees with him.
Jack Forehand retweeted
"For growth strategies, always have an exit strategy."
"For value strategies, always have an entrance rule, a reason to buy."
Rob Arnott on the one lesson he would teach the average investor.
Jack Forehand retweeted
"Everyone wants to take advantage of the psychological mistakes of the market."
Very few turn inward and ask: "I have some pretty serious flaws. How do I make them smaller?"
Gary Mishuris on a blind spot that a paper portfolio can’t expose.
Jack Forehand retweeted
Producer prices are up 6.3% over the past year, the biggest annual increase since December 2022.
Higher costs can create a second problem for investors: needing cash before long-term investments pay out.
"Cashflow needs today start overwhelming long-term growth."
In this earlier discussion, Richard Bernstein used college endowments to make the mismatch concrete: rising operating costs, with assets tied up in illiquid investments.
Can your portfolio fund the bills when they arrive?
Jack Forehand retweeted
"They’re not gonna be higher for longer. They’re gonna be normal for longer."
Ed Yardeni thinks investors are using the wrong benchmark for interest rates. The unusual period may have been the years when borrowing was almost free.
Jack Forehand retweeted
"There’s no assets. There’s no revenue. It’s completely intangible."
A P/E ratio can’t help you value a pre-revenue biotech. Dan Rasmussen looks for clues that traditional stock screens miss.
Jack Forehand retweeted
"If I gotta go several years below water, I got a problem."
Volatility tells you how much prices move. It doesn't tell you how long you might wait to regain a previous high.
Jim Paulsen looks at the consecutive months the U.S. stock market has spent below a record high, and explains why that wait matters to investors.
Jack Forehand retweeted
"You don't need to over-bet."
Robert Hagstrom on why being comfortable with a concentrated bet in your own account is different from taking one with a client's retirement money.
Jack Forehand retweeted
"If your bond market is uninvestable, there are two things that are gonna be tricky about that."
Andy Constan uses Japan's zero-yield era to explain why he studies a country's bonds before sizing up an investment in its stocks.