Spend time reading any of the RWM Mafia and a pattern as to why we put words to page begins to emerge. We write to:
Figure out what we think
Explore a topic or idea
Memorialize an investment position (or potential trade)
Publicize a concept
Signal interest in a topic
Debate / argue around an issue
Defend an idea or position
Educate ourselves about a thing
Resolve a noisy internal dialogue
I am going to share a few examples, and if you look for a consistent thread through all of them, you should find that: Each adds value, searches for truth, expounds on deeply held beliefs, are sincere, and reflect curiosity about the world. If only everything I read had those 5 attributes.
Michael Batnick is Head of Research at RWM, a founding principal, and a crucial component of our investment committee (he does the heavy-lifting, I get all of the credit). This post is a perfect example of teaching readers even as he admits what he doesn’t understand:
All of this stuff is incredibly confounding. On the one hand, you have normal people speculating on Doge, which is cute and mostly harmless. I mean, it says right there on the website that “Dogecoin is an open-source peer-to-peer digital currency, favored by Shiba Inus worldwide” Silly, sure, but hard to get too worked up over this. And then on the other side are wealthy people who buy pet rocks as status symbols. I understand this drawing your ire, but I hope now, or at least after reading Packy’s piece, that you understand people’s motivations.
And then, in the middle, you have brilliant investors like Chris Dixon who swear that this is web 3.0.
Blair duQuesnay is a triple threat: She is a CFA who sits on our investment committee, an advisor/CFP, and she also manages RWM’s UHNW practice. A recent discussion reveals her curiosity and insight:
I find myself rebelling against this change like a cranky old man. Back in my day, Pluto was a planet! I refuse to call it a silly dwarf planet. Bah humbug! I’ll probably get angry again when my kids start learning the solar system in school.
I notice this tendency among professional investors. The sands of time shift the way the world of money works, if only ever so slightly. What worked in investing 40 years ago, may not work today. We cling to the groundbreaking academic papers of yonder days – mean-variance optimization, the small-cap premium, the value premium, and book value. We read the masters – Ben Graham, Modigliani, Miller, Fama, French, and Merton – and we deem their work Gospel.
Has anyone pursued the financial well-being of teachers more than Tony Isola? That is what he and Dina Isola do for RWM. This is first-rate:
Self-deception is a raging epidemic.
A myriad of factors influences our point of view. Genes, family life, friends, experiences, and other items determine perceptions.
Why do we believe our experiences are reality?
James Low reinforces this concept.
These stories have a tilt or bias. This generates a selectivity in our attention which blocks many of the other possibilities we might entertain.
Delusion becomes fact. The worst part- We aren’t aware.
Neither is anyone else. Nobody wants to rock the U.S.S. Delusion.
Everyone’s wearing tinted sunglasses. Viewing reality in different shades turns fantasies into reality.
Nick Maggiulli is our resident quant/data wonk/COO. This post is classic “Nickie Numbers” – take generally accepted wisdom, crunch the numbers, prove it is bullshit:
But today, I’m going to change all that. Because today I’m going to give Buy the Dip the proper burial that it deserves and demonstrate without a reasonable doubt why it is a terrible investment strategy.
Ben Carlson may be the best financial writer today who regularly uses data to demonstrate points on investing strategies. He works with our institutional clients. I could show you countless examples but let me simply go his most recent:
The U.S. stock market is up 13.5% per year since 2009.
Valuations have been well above historical averages this entire time and moving ever higher.
Interest rates are about as low as they’ve ever been.
Add all this up and it’s hard to argue with the idea that investors should lower their return expectations going forward.
The problem with this equation is you could have said this very same thing in 2012, 2013, 2014, 2015 and so on yet it hasn’t happened. The low return environment that seemed like a sure thing has been nothing but high returns.
There are few people in the world who can identify connections between disparate ideas like my partner and RWM co-founder Josh Brown does. His ability to see what everyone else misses is unprecedented. And his writing is so sincerely beautiful. Like this piece:
I Collect Cashflows
I collect shares of businesses. Been doing it since my late teens. Not always successfully. I use a certain type of non fungible token called a stock certificate for this. I never lay hands on the certificate, it’s in digital form, living somewhere in the multiverse. A company called DTC makes sure the shares I’ve bought are the shares I get. And then I hold them. Sometimes I will trade them for digital dollars that I also don’t ever see or touch, but then soon after I am trading those dollars for another pile of virtual stock certificates. People will say “You’re crazy, why would you want to buy a fraction of a company you will never touch and hold in your hands?” And I’m like “You just don’t understand.”
When ideas come together in a way that is informative, entertaining, and educational it is a thing of joy.
Beautiful, just beautiful.