Excess Returns | SignalBridge Wealth https://nitter.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
The S&P 500 is the 1992 Dream Team. Ian Cassel is trying to beat it with a roster of no-name microcaps.
"It's Michael Jordan. It's Larry Bird."
"It's Nvidia, it's Microsoft, it's Google."
"In any given year, I might look like a hero or an idiot."
His goal is to beat it over 10 years.
Jack Forehand retweeted
Why can a crowd guess the weight of an ox but get a stock market bubble wrong?
"Nobody's really emotionally attached to the weight of an ox."
Alex Edmans on what changes when investors' mistakes all point in the same direction: "We actually reinforce each other's biases rather than neutralize them."
Jack Forehand retweeted
PCE inflation rose to 3.6% year over year in September.
The risk for a portfolio: stocks and bonds can fall together.
In this earlier conversation, Eric Crittenden points to 2022 as a test of an all-weather portfolio: having something that can thrive when both fall, in a size that matters.
"All weather to me is simply being prepared for what we know is plausible."
Jack Forehand retweeted
A big loss costs you more than the money you lose today.
"If you lose your capital, you're out of the game."
"You forego the chance to play in good games in the future."
Kris Abdelmessih on keeping enough capital for the next opportunity.
Jack Forehand retweeted
AI data centers aren't just a bet on the chips inside them.
"They're extremely valuable, even if the chips wear out."
Jay Hatfield argues that scarce land, power access and permits can retain value after the hardware depreciates.
Jack Forehand retweeted
Could your index fund become venture capital's exit strategy?
Chris Davis worries that huge private companies could eventually find price-insensitive buyers in index funds.
He calls it his "really dark tinfoil hat conspiracy theory."
Jack Forehand retweeted
"The hardest thing for people to do is nothing."
"I think our investors expect us to buy something, sell something, do something."
"Buy things and hold them for long periods of time and save more."
Gregg Fisher on the one lesson he would teach the average investor.
Jack Forehand retweeted
"The returns always come later than people thought."
Dan Rasmussen's concern about the AI build-out: spending can outrun the payoff.
Kai Wu explains the trap: "That leads to a collective over-investment even if the individual is rational."
Jack Forehand retweeted
Cliff Asness thinks faster markets aren't necessarily smarter markets.
"I think most of that is about speed, not about correctly processing information."
"I'm old, but I'm not carrier pigeon old. We had Bloombergs and we had phones."
Jack Forehand retweeted
"Cathie and her team, they are good stock pickers."
Kai Wu's factor model finds positive stock-picking alpha in ARK. But the portfolio's tilt toward small, unprofitable companies worked against it.
Jack Forehand retweeted
Even an incredibly well-run steel mill can be overwhelmed by its industry.
Tom Maher's question for investors: "How much can they make their own weather?"
A company's execution matters. So does how much its fortunes depend on the economy around it.
Jack Forehand retweeted
Using AI for free doesn't tell you how much customers will pay for it.
"We'll find out about demand elasticity in a hurry" when prices rise, says Jim Paulsen.
"I think it's gonna be successful over time. I just don't think it's gonna be nearly as quickly as people are suggesting."
Jack Forehand retweeted
"This isn't wise, but sell everything."
Knowing that panic-selling is a mistake doesn't always stop an investor from doing it.
Daniel Crosby uses a March 2020 example to explain why understanding risk while calm is different from living with it during a crash.
Jack Forehand retweeted
"Capitalism requires win-win, and we're all taught to think win-lose."
Rob Arnott's test for a durable moat: does the company produce something that's worth more to its customers than it charges them?
Jack Forehand retweeted
"The most painful thing is when a client throws the towel in on the bottom."
Colin McQueen doesn't just ask whether a portfolio fits his outlook. He asks what it looks like if that outlook is wrong.
Jack Forehand retweeted
"They're companies that got sloppy and lazy 'cause they could grow with very little reinvestment."
Alphabet expects capital spending to "increase significantly" in 2027.
Aswath Damodaran's earlier warning about Big Tech's move into heavy infrastructure spending: "The way I have to read their earnings reports has to change."
Jack Forehand retweeted
Some investors want their portfolio optimized to the third decimal place. Brian Portnoy thinks the more useful question is whether it fits their goals.
"They tend to want the right answers to the wrong questions."
Jack Forehand retweeted
"It always feels awful buying at the bottom, and you're never gonna pick the bottom."
Ted Mortonson on a lesson from his mentors: buying from fearful sellers rarely feels comfortable.
Jack Forehand retweeted
"If you feel like something's can't-miss, you probably missed something."
Daniel Crosby on why deeper understanding usually brings more humility, not more certainty.