The Same Instinct, Two Different Vehicles Here is something that will bother you once you see it. A software engineer in Stockholm and a software engineer in Austin both do the exact same thing with their money. They take a portion of their income and place it into a system they believe will return more […]
Why Scandinavians Pay Taxes Like Americans Invest in the S&P 500 Read More »
Napoleon Bonaparte wanted to conquer Europe. What he actually conquered, without meaning to, was the way money works. The man who nearly unified a continent by force ended up unifying something far more lasting: the logic behind how investors spread their bets. This is not a story about Napoleon the general. It is a story
How the Napoleonic Wars Accidentally Invented Modern Diversification Read More »
There is a strange ritual that happens several times a year. The chair of the Federal Reserve walks to a podium, reads a carefully prepared statement, and manages to talk for thirty minutes without saying anything concrete. Reporters then spend the next 48 hours arguing about what was actually said. Markets move billions of dollars
Strategic Ambiguity: Why Central Banks Never Say Exactly What They Mean Read More »
In September 1985, finance ministers from five of the world’s largest economies gathered at the Plaza Hotel in New York City. The carpets were expensive. The chandeliers were ridiculous. And the agreement they signed would quietly detonate one of the most spectacular economic bubbles in modern history. The Plaza Accord was, on paper, a gentlemanly
The Alternate History: What if Japan Never Signed the Plaza Accord? Read More »
The Handshake That Built the Modern Dollar For fifty years, the world has run on a quiet agreement that almost nobody voted for and most people have never examined. Oil gets priced in dollars, those dollars get recycled into United States Treasuries, and America gets to borrow money at rates that would humiliate any other
What Happens to the Dollar When Oil Gets Priced in Something Else? Read More »
There is a seductive simplicity to the phrase “European stocks are cheap.” It shows up outlook, every quarterly letter from asset managers trying to sound contrarian, and every financial headline that needs a hook. The pitch goes something like this: European equities trade at a discount to their American counterparts, therefore they represent value, therefore
Most investors treat market capitalization like a number on a scoreboard. A company worth ten billion dollars is simply ten times bigger than one worth a billion. This arithmetic thinking makes intuitive sense until you actually try to double these companies and discover that the laws of finance behave more like the laws of physics
The Physics of Finance: Why Doubling a $10B Market Cap is 10x Harder Than a $1B Read More »
Everyone loves good economic news. Rising GDP, falling unemployment, consumer spending through the roof. Politicians celebrate it, financial commentators cheer it, and your neighbor won’t stop talking about how great business is at his company. The economy is humming, and naturally, your portfolio should be soaring too. Except it doesn’t work that way. Here’s the
Why a “Strong Economy” Can Actually Be Bad News for Your Portfolio Read More »
Every year, the same story plays out in living rooms and coffee shops around the world. Someone mentions they made a killing on some stock. Everyone else feels a pang of regret. Why didn’t I see that coming? Why am I always late to the party? And so begins another cycle of reading newsletters, watching
Stop Chasing the Next Big Thing: Fama-French Proves You Just Need Three Read More »
The Currency That Refuses to Be Categorized The Swiss franc breaks the rules that govern every other major currency. It functions as a funding currency for carry trades, yet it also serves as one of the world’s premier safe haven currencies, and these two roles should logically cancel each other out. A funding currency is