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This is as true for professionals as it is for amateurs; it’s also true in music, film, sports, television, and economic and market forecasting. Economic Innumeracy : Some individuals experience math anxiety, but it only takes a bit of insight to navigate the many ways numbers can mislead us. Bad Numbers : 4. Index (mostly).
TIPS have suddenly moved to center stage for investors, as the surge in inflation has drawn new interest in Treasury inflation-protected securities. And recent declines in TIPS’ auction prices, along with other market signals, suggest some investors believe inflation may cool off, which could also hurt their returns.
If only there were some ways to prevent investors from interfering with the markets greatest strength the incomparable and guaranteed ability to create wealth by compounding over time. Drawdowns, corrections, and crashes are not the problem your behavior in response to market turmoil is what causes long-term financial harm.
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In an interview with Lynn Parramore of the Institute for New Economic Thinking, Nomi Prins takes up and extends the argument that she has made over a series of books, that central bankers are ever-more administering policies that are good for the markets but very bad for the real economy and real people. But that was just a small part of it.
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I was always good at math, but I really, I just didn’t relate to things that were more esoteric bonds options. So we really hit all the major markets and all the major geographies. And you know, in private markets the repricing always takes a lot longer than public markets. I have no family history.
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I didn’t know a whole lot about markets or stocks. ” But I really had an interest in trying to work directly in markets. So I worked at a private equity firm, that middle market private equity firm Yale had money with. SEIDES: But market returns across — RITHOLTZ: The past decade, 2010 to 2020, we were what?
There are a few people in the world of fixed income that understands the bond market, the ETF market, what the fed’s doing, what is driving both institutional and household investors on the fixed income side. It’s sort of like math with dollar signs attached to it. I thought this conversation was really fascinating.
I took a lot of math classes. I couldn’t give up math in computer science. And ultimately the decision was to focus more on developed markets. It’s, it’s really more about staying ahead of inflation than it is about generating market beating returns. But for me, this was not an option. at Wellesley.
And then covering, not in the mayhem of that Monday, but pretty close to the bottom tick on Tuesday, really just a fascinating career, a unique perspective on markets. I found this to be a master class in a humble approach to markets and being aware of your own limitations in order to obtain the best possible results as a trader and investor.
And if this sounds like two old friends just yammering about all sorts of market esoterica, well, that’s because it is. But he also has an incredible depth of knowledge about market structures, about what people get wrong about thinking about systems, about what we get wrong about humans, and capitalism and finance. NADIG: Yeah.
So from a client strategy, marketing standpoint, and then overseeing the investment team. And the reality is that, we know that’s very difficult to do and outperform the broader market. Let’s talk a little bit about the Vanguard Total Market Index. So a variety of risk meetings, a variety of economic meetings.
directly via email: Resources Featured In This Episode: Looking for sample client service calendars, marketing plans, and more? And we’re going to talk about what’s going on in the markets, briefly talk about the portfolio. Get notified of the latest episodes (and all our research as it’s released!) Cean: Thanks, Michael.
KLINSKY: You know, and what we were doing was basically advising Goldman clients how to take their own family businesses back off the stock market. September 13, 1981, I think the 10-year Treasury was 15.84 percent 10-year Treasuries, it is nowhere near kind of the situation. There was no junk debt available in the market.
So I, I did a math degree at Oxford, which is more pure math. You know, pure math can be very theoretical and detached from the real world, and it’s getting worse. It’s a function of log normal returns that we see in, in stock markets. Outperform the market over decades and you’re a winner.
I’m good at math and science and you know, I always had an idea what go into business, but I felt that electrical engineering would be a good foundation. And I was intrigued by the markets at the time, in the mid eighties, you had a lot of stuff going on in terms of the merger boom. You graduated from high school.
And this is just a masterclass in how to manage assets, think about your career, understand the relationship between markets, between fixed income, the Fed, the dollar, sentiment, consumer spending, just everything is related and understanding what matters when is the key to your success. And you know, I love markets. RIEDER: Yeah.
And I was a math nerd as a kid. So again, so it came back out to the market and it held on to all the pieces except Danaher. He developed the Ginnie Mae contract, which at one time was a big thing in treasury bond contract. What’s the most current data point that may not have filtered into the market?
This is the back when mortgages were sort of a backwater of the fixed income market. It takes quite a lot of, of research, quite a lot of modeling, quite a lot of data to actually keep up with the mortgage market. By the time you get to the early 2000s, Freddie Mac, Fannie Mae and me were losing market share.
So while you might once upon a time have thought about, you know, the Morgan Stanley financial advisors as, as, you know, serving that ultra high net worth, you know, core client, you know, now we’re, you know, serving folks in the mass market through E-Trade. I mean, let me just give you an example. Those are such non-normative terms.
If you are at all interested in fixed income, how you assess bonds, how you evaluate the economy, the market, what the fed’s gonna do, what clients want, how to assess risk in credit markets, well then you are gonna really enjoy this conversation. . ~~~ 00:00:02 [Speaker Changed] Bloomberg Audio Studios, podcasts, radio News.
He, he does some really, really interesting research and gets deep into the weeds on things like market structure, liquidity cascades, what really drives returns, how much should you be focused on alpha versus beta. And I, and I really like the application of math and statistics and computer science to markets.
And then, as it turns out, a switch flipped in the market in 2014 was a record, 2015 was a record. You know, that February, March market started to go, I mean, this started as a financial story, I guess, is how I got involved, which is that markets woke up to it very quickly, and things got hairy very fast.
And so he kind of put himself out there on the job market and he thought, well, I could either go for a dean position or I could, you know, go for some kind of endowed chair somewhere, you know, move up. Wasn’t the Excel spreadsheet error, which changed their math. And you know, he, he’s a history professor.
I wanna, I want to get into some of the details before we start talking about markets and investing. Yeah, you have to, you know, the conceit of finance is that basically the math is all there is to it. So you’re a proponent of modern portfolio theory and the efficient market hypothesis. I, I’ve had enough of that.
I’d been ranked i i back in the seventies, if you can do the math. And the stock market, you know, had a pretty big drop. And then it turns out, you know, the market, if you go from 91 forward market just sort of went up and business was good and it was good basically until maybe 2010.
LINDZON: So in 1980 — RITHOLTZ: He just put out a new show, so he’s off the market for a while. And luckily there was a bull market. LINDZON: Just hating the market. I didn’t understand the market. So what’s going on with the markets? It was just coming out of such a bear market.
Yes, there’s a legitimate need and use for private equities, especially in mid-markets where, to be blunt, Wall Street has just abandoned that space and gone upmarket, creating a vacuum. Anyway… RITHOLTZ: And I don’t recall that bear market at all. MORGENSON: Right. RITHOLTZ: Right. MORGENSON: Wait, wait, wait.
[ Gary Cohn ] 00:03:56 So two years earlier, and now we’re going back in time, the summer of 80, for those of you that remember the summer of 80, the Hunt brothers at that point were silver, were exactly, were trying to corner the gold and silver market. They were buying the, the Comex market. It was brand new.
Jeffrey Sherman : Well, what it was was, so I, as I said, with applications, there’s many applications of math, and the usually obvious one is physics. Barry Ritholtz : It seems that some people are math people and some people are not. The, the math came easier. And I really hated physics, really. It’s so true.
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