Jack’s Links

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Back with a new edition of the best links on the interwebs. With apologies to Scott Sumner, I’ll be putting a moratorium on links to posts of his through at least the end of February. Here’s his website.

AQR with a great article addressing the “FANGs” that have been blamed by many a money manager for their underperforming of the benchmarks this year. Reminds me of the rule of thumb about retail stocks that blame the weather for poor results…

“X people have more wealth than the poorest 50% of the world’s population” memes have had a revival. I expect this will continue for the rest of my life, but it still is a totally meaningless and borderline asinine thing to say. Felix Salmon had a nice rebuttal the last time this pox came around. If everybody who saw the X vs 50% meme read this instead, the world would be a better place.

Extremely interesting paper (free download) about mutual funds vs. hedge funds, especially momentum vs. contrarian. I’m not sure why they kept controlling for momentum effects. It seems like that is a key feature, not a side-effect of mutual funds (especially index funds, which are taking a larger and larger share of the market). The persistence of the results they found for hedge funds was also interesting. h/t abnormal returns.

People are sheep who interpret everything through the lens of their political tribe. Unless you offer them a dollar for the truth. Not sure if this means that people are actually sheep or that ‘normal’ polling is a foolish exercise.

Betterment sent out this email about people checking their portfolio too much. Going to be very curious to see how much of a behavior gap emerges once ‘roboadvisors’ have had a chance to have a full cycle or two of results under their belts.

A sad one: Fireside Markets, the monthly podcast that James Osborne of Bason Asset Management puts out, is going on hiatus. There’s a serious dearth of financial podcasts that can keep my attention, so this is a rough blow. Here’s the link to all of them: http://www.basonasset.com/category/podcasts/

It’s easy to forget the value of cash, times like this make for a good reminder.

Another study that found that ‘simply doing X for 2 minutes can increase [insert desirable hormone]’ failed to replicate. This time it was the very well known (thanks to a hugely viral TED talk) “Power Pose”.

Fun conversation between &  about Medicare for all (and by loose association, Bernie Sanders). Something you should definitely read if you plan to talk to anyone about politics in 2016.

Statistical analysis from GestaltU on the relative importance of asset allocation versus security selection vis-à-vis portfolio returns. As we should all know by know, the pond you’re fishing in matters a lot more than the bait you’re using. I’ll take this opportunity to link my August 2015 post about asset allocation, especially if you happen to live in a (relatively) small country. I.e., virtually anywhere besides the US.


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