Even more coverage of dividend investing, this time an article in Business Insider.
Dividend investing is! sustainable investing
Dividend investing was “sustainable” decades ahead of the current frisson of ESG-based sustainability. Think about it. The attraction of an income stream—whether of a publicly traded or closely held asset—is its value over time. Whereas a “price only” asset can be bought or sold tomorrow with the intention of profiting from a change in price a week or month from now, an income stream-based asset delivers its worth over many years. Investors might agree or disagree as to the current value of that income stream—and put a changing, daily price on it—but the NPV of the income stream is measured …
Suddenly lots of media attention for dividend investing…
Is that a sign of a top in investor sentiment? Very near-term, perhaps. Longer-term, not at all. Dividend investing has been falling out of favor for the past three decades. The mean reversion back to “normal” business ownership practices and cash return metrics will play out over a decade, if not more. For now, however, a WSJ article about being at the top.
The NBN interview of Vitaliy Katsenelson
A well-lived life closely examined. Listen in to my New Books Network interview of Vitaliy Katsenelson — a rare US public intellectual–about his “Soul in the Game: the Art of a Meaningful Life”, just out from Harriman House. https://newbooksnetwork.com/soul-in-the-game
Talking rates, dividend investing & the future of the stock market w/Demetri Kofinas.
Great fun catching up with Demetri Kofinas on his Hidden Forces podcast. We discussed interest rates vs risk rates, cashflow real economy companies vs. rainbow stocks, and the role of agency in history…. Please listen in. The Revenge of Risk Rates & the Return of Dividend Investing | Daniel Peris
Stock market drawdowns during retirement…..
A follower wrote in to suggest a stronger assertion of the value of dividend-focused investing for retirees concerned about drawing down their portfolio. He argues that for those investors, the sequence of their returns matters hugely, especially in a market not moving up steadily. (He was responding to my post about the difference between a harvested capital gain vs. a dividend payment.) He writes: “The argument goes that there’s no difference between an income stream derived from selling stocks or one derived from amassing dividends. But that isn’t true. Selling stocks in a bad year means selling more stocks. Dividends …
A dollar may be fungible; how it is generated is not.
The recent market sell off has provided investors an opportunity to reconsider a fundamental belief in modern finance and investment. And that is that investors are indifferent between the two forms of return, a harvested capital gain or a cash dividend payment. That notion underpins pretty much all of modern stock market investing, from the calculation of return, to the capital allocation of corporations, to the behavior of investors. In short, it’s a biggie. And in a rising market, it looks like a pretty good assumption, since most of the time the market is up, open and liquid. The belief …
The Language of Career Transition 2/x
A continuation of a LinkedIn post on career transition: 2/x In retrospect, I liken my career transition mostly to learning a new language. By language, I mean not high-school French, but language in the broader sense of a means of communication, an agreed-upon set of references, of metaphors and understandings. Music and mathematics are languages in that sense, and recognized as such. Computer coding languages are narrower but the same. Trained in history and having learned Russian, I was completely mute in regard to the language of business, finance, and investing. I don’t want to downplay the technical skills involved …
Twitter Posts from February 7, 2022 to the present on the geo-political situation in SE Europe
One month in, got some right; got some wrong. Will continue to update, at east for a while. March 20, 2022 A forceful reminder of why, particularly now, we should be engaging Russian culture more, not less. Please read this. As Morson fans already know, Saul is incapable of dull or shallow thinking. https://quillette.com/2022/03/19/putins-russian-and-pushkins-russia/ March 20, 2022 Sadly, the death toll from WW I continues to rise, yes, the First World War. The decisions/treaties/boundaries (Sykes-Picot, Soviet “Union”, etc)/movements associated w/the “Great War” and the years immediately following (1918-1922) are still driving today’s geopolitical and military realities. The tragedies of WW …
Episode 26: Martin Fridson revisiting his 1993 Investment Illusions
The legendary Martin Fridson joins me to review his classic Investment Illusions: A Savvy Wall Street Pro Explodes Popular Misconceptions about the Markets (Wiley, 1993). What has changed? What is the same? Want a good bead on the present and future of the markets? Get up to speed on the past.
Gabelli Fordham Centennial Speaker Series on “Getting Back to Business”
My conversation about Getting Back to Business/operating as a historian in the capital markets with Fordham-Gabelli School of Business Professors Jim Kelly & Sris Chatterjee has now posted. Thanks to the Gabelli staff as well as co-sponsors the Museum of Finance and the New York CFA Society. Link: Gabelli school conversation
Episode 25: Trust in finance? A heretical view, perhaps, but here’s why.
It’s easy to say you don’t trust anyone or anything in the investment community. That would be a big mistake. Listen in and learn why.
The NBN interview with the editors of The Life Cycle of Russian Things.
This collection of articles, edited by Matthew Romaniello, Alison Smith, and Tricia Starks, takes up the history of material culture over the past several centuries of Russian history. Widely diverse objects such as maps, textiles, building materials, cigarette cases,fish guts (yes…), samovars, samizdat, and even the T-34 tank are viewed in light of their role in Russian society. Hence the collection’s striking and unusual title: The Life Cycle of Russian Things: From Fish Guts to Faberge, 1600 to the Present (Bloomsbury Academic, 2022). Tune in for my conversation with the authors: the NBN interview
Episode 24: Benjamin Ho on trust in finance and economics.
Vassar College Professor Benjamin Ho joins me to discuss the role of trust in finance and economics. He is the author of the just published Why Trust Matters: An Economist’s Guide to the Ties That Bind Us. (Columbia University Press, 2021)
A century of cultural genius: the NBN interview with Jeffrey Brooks.
Explore “a century of genius” with JHU’s Jeffrey Brooks as he delves into Russia’s period of greatest cultural intensity. The New Books Network interview about his The Firebird & the Fox (Cambridge, 2019). New Books Network | Jeffrey Brooks, “The Firebird and the Fox:…
Episode 23: Paul Schmelzing on the long-term decline in rates
Financial historian Paul Schmelzing takes on many of the assumptions of 20th century financial economics–about risk-free rates, real rates, risk premia–and suggests that they fail the “out of sample” test. How has he done that? By meticulously creating an 800 year data set that indicates more than six centuries of declining returns. In the process, he takes on Thomas Piketty’s claim that returns on financial assets have consistently exceeded broader economic growth, leading to ever greater economic inequality. Not so says Schmelzing. If you are thinking about asset allocation for the next decade or so when rates are supposed to return …
Episode 22: Ed McQuarrie on the importance of 19th c data for your 2022 asset allocation.
Consider the shibboleths of our trade, deeply embedded in our risk models, our IPSs, our return expectations: stocks are better than bonds over time, stocks are risk assets, bonds are risk-control assets, a resulting equity risk premium, with real growth from equities. What if it turns out that these are not exactly true? What if these conclusions are based on incomplete data? That would be a problem, wouldn’t it? And what about the present time, what’s unusual about it compared to earlier investment periods? These answers and more when Edward McQuarrie, retired business professor from Santa Clara University, joins me …
A meditation on trust in finance. Yes, you read that correctly.
I have been wondering about the role of trust in modern finance. To judge by the academic literature and the dominant rules and formulas, it has no role whatsoever. I find that paradoxical, to say the least, because trust is inseparable from participating in modern society. Everyday we make judgments, including economic and financial ones, based primarily if not exclusively on trust, as opposed to a calculation of odds, risks and rewards, costs and benefits. Academics refer to these daily challenges as exercises in “decision making under conditions of uncertainty.” Modern finance tries (and has failed) to quantify that decision-making …
Leading from the middle: The NBN interview with John Roy Price
History is told, it is said, by the victors. And so it is in regard to Richard Nixon. We all know how his presidency ended. What too few of us recall or bother to learn is how it started. In his new The Last Liberal Republican: An Insider’s Perspective on Nixon’s Surprising Social Policy (UP of Kansas, 2021), John Roy Price details how in Nixon’s first few years in office, the President ardently tried to lead from the middle to eradicate the widespread poverty that had so characterized his own upbringing. It is a view of Nixon and a big-tent, policy-driven Republican Party that …
Episode 21: Getting perspective, with the brilliant & wide-ranging Will Goetzmann
How does an art historian, TV producer and art museum director end up teaching quantitative finance? I am joined by Will Goetzmann, the Beinecke Professor of Finance at Yale’s School of Management, to discuss the virtues of changing careers, being interdisciplinary, and following your curiosity. He is one of the most interesting people you are likely to encounter.
Episode 20: The economics of education, with university president David Finegold
Ever wonder about the economics of higher education? Are the people in the classroom, “students” or “customers”? Who is accountable to whom? Who is in charge? Chatham University President David Finegold joins me to view higher education through the lenses that we often use to examine businesses: value creation, accountability, and future trends. It makes for sober listening.
History matters: is our current bout of inflation transitory?
Post a global pandemic, labor is in short supply, inflation is everywhere. Is it transitory? What happens next? History matters. Very similar circumstances after the Black Death in Medieval Europe …. One of many analyses to ponder: https://ideas.repec.org/p/tor/tecipa/munro-04-04.html
If it sounds too good to be true….
If it sounds too good to be true, …. Big takedown of the Private Equity industry by former PE manager Jeff Hooke (now of JHU-Carey). His new The Myth of Private Equity (Columbia Business School Publishing, 2021) highlights the sky-high costs, poor returns, & very low visibility. And yet, the industry persists… Hooke’s expose is a latter day “Where are the Customers’ Yachts?” The New Books Network interview.
Seeing the right Navalny.
Everyone has heard of Alexei Navalny, the leader of Russia’s opposition to Putin’s rule. But what do we really know of him? Navalny: Putin’s Nemesis, Russia’s Future? (Oxford, 2021) provides the first detailed political biography of Navalny. Most importantly, Ben Noble, Morvan Lallouet, and Jan Matti Dollbaum turn the one-dimensional, cartoon-like image of Navalny in the West into a nuanced portrait, properly situated in the context of modern Russian politics. The New Books Network interview is here.
Episode 19: Kristy Ironside, “The Full Value Ruble” & current debates on currency, inflation, & monetary policy.
Thinking about the dollar, crypto, fiat currency, MMT? Get some perspective on the purpose of currency, managing money supply, inflation, wage pressures and all the currently popular financial issues……from a review of how Soviet bureaucrats grappled with similar challenges in the 1950s. Yes, Soviet bureaucrats. Seem remote? Of course, on one obvious level it is. On many other levels, however, the challenges were quite similar. Professor Kristy Ironside from McGill University joins me on the show to discuss her just published Full Value Ruble: The Promise of Prosperity in the Postwar Soviet Union (Harvard University Press, 2021).
How big is your platform? or “What color is your parachute?” 50 years later.
I recently got this very positive email mail through a professional social media platform: “:) .. your web site is treasure of great insights – I’m in my year two of my MBA journey and more and more I found myself checking historical and geopolitical “whereabouts” when reading the cases the profs. thrown on us .. I think it’s a/THE key to fully understand what is happening “behind the scenes” of all/most they want us to do (evaluate equities or M&A deals, making recommendations, etc. etc. ) unfortunately it’s mostly omitted…” I was touched. The thing is, nobody goes to …
Episode 18: Big user of index funds/ETFs? Better look under the hood.
The brilliant Adriana Robertson, professor of law and finance at the University of Toronto, joins me to discuss what’s really going on behind the scenes at “passive” ETFs and index funds. You might be surprised to learn that they are nowhere near as passive as you think. Investing is about making decisions under conditions of uncertainty. Modern finance, including the mountain of marketing and academic literature behind index products, seems to offer a way around that fundamental human challenge. Not so. Hear why.
Episode 17: Counting your Investment Returns
How is your investment account doing? Do you really know? This episode of Keep Calm & Carry On addresses how investment returns are measured, and not measured. Is the race to the swift and the battle to the strong? Well, it turns out, “it’s complicated.”
It’s time to retire “Left” and “Right”.
George Orwell’s famous 1946 essay, “Politics and the English Language,” lamented how ideologues were wreaking havoc not only on their societies, but also on the language of politics itself. He condemned the “staleness of imagery” and the “lack of precision” in the political writing of his day. During the past 75 years, little has changed. The labels and personalities may be different, but the abuse on and by words is much the same. We can all agree that the United States has become politically polarized, especially so in the past half-dozen years. In better times, Yeat’s middle translated into a …
Episode 16: Two dividend investing heresies.
In this special episode, I admit to several heterodox views of dividend investing. The first concerns the market’s yield as a predictor of future returns. The second offers an unusual view of dividend cuts.