“Revolutionary technology” doesn’t boost productivity, profits or returns. Speculators in AI and crypto are the latest to delude themselves. DeepSeek Isn’t AI Speculators’ Biggest Worry “DeepSeek has sparked a deep freakout,” reported The Wall Street Journal (“Nvidia Stock Sinks in AI Rout Sparked by China's DeepSeek,” 27 January). “The Chinese artificial-intelligence … [Read more...] about Never mind DeepSeek: here’s why the AI mania won’t last
The consensus is wrong: America’s economy is chronically ill
Its GDP is growing – but relies upon mammoth, debt-fuelled deficits. Without this “stimulus” the U.S. would’ve been in recession since 2009. A “Remarkably Strong” Economy The consensus is convinced: from the GFC to the COVID-19 pandemic the U.S. economy was robust, and since the pandemic it’s been remarkably strong. Although consumer confidence has underwhelmed, over the past … [Read more...] about The consensus is wrong: America’s economy is chronically ill
Today’s private credit – tomorrow’s public liability?
Today’s private credit reminds me of “junk” bonds and private mortgages in the 1980s-1990s. These “innovations” created disasters. Leithner & Company neither owns private credit nor plans to do so. We’ve conducted no due diligence in this space; we therefore know little about the major players, whether in Australia or overseas, and nothing of the contents and quality of … [Read more...] about Today’s private credit – tomorrow’s public liability?
To lift your returns, swap these risks
If you want to commit fewer loss-making errors, you must accept more gain-foregoing ones. I establish and justify this crucial exchange. Investors inevitably make mistakes. That’s because investment unavoidably entails risk and uncertainty. (By “risk” I mean known potential outcomes and estimates of their likelihoods; uncertainty, in contrast, entails outcomes that are … [Read more...] about To lift your returns, swap these risks
Warren Buffett’s 25 biggest mistakes – and 4 lessons they teach
Unlike many investors, he admits and mostly corrects his errors. He discerns two types; knowing their differences can spare you much grief. Sometime in the mid-1990s (I recall vaguely but can’t find the quote), Alan Cameron, who at that time headed the Australian Securities Commission (ASIC’s predecessor), defined an experienced investor as one who accumulates plenty of errors … [Read more...] about Warren Buffett’s 25 biggest mistakes – and 4 lessons they teach
How you – and managed funds – overstate your returns
An investment’s average result ALWAYS exceeds – often greatly – its most likely result. I explain how and why, and what you can do about it. Most Investors and Traders-Speculators Underperform It’s long been widely known: the long-term returns of most managed investments fail to match – never mind exceed – benchmarks such as the S&P 500 and S&P/ASX 200 indexes. … [Read more...] about How you – and managed funds – overstate your returns
Why Australian equities will again outperform
Their earnings have sunk since the GFC, yet even weaker bases underpin the S&P 500’s returns. Aussie stocks thus offer better prospects. Overview Over the past decade and more, the total (incorporating the reinvestment of dividends) returns of the All Ordinaries and S&P/ASX 200 indexes have underperformed the S&P 500 Index. According to Roger Montgomery, dividends … [Read more...] about Why Australian equities will again outperform
How experts’ “systematic mispredictions” improve our returns
Their forecasts lure most investors into overconfidence – and thus losses. If you recognise experts’ biases, you can grasp opportunities. Preview A week, it’s often been said, is a long time in politics. If so, a couple of days can be an eternity in financial markets! On 2 August, a journalist in The Australian (“Markets find ‘sweet spot’ in policy, outlook”) wrote: “... the … [Read more...] about How experts’ “systematic mispredictions” improve our returns
Investors, prepare: Australia will abandon its emissions targets
Its power transition is fading, its energy transition is fiction, net zero is fantasy – and politicians’ transition to reality has begun. The mainstream media’s coverage of “climate and energy policy” (the Albanese government has yoked the latter to the former) is grossly unbalanced. Whether it’s The Australian or Guardian Australia, reports are slanted overwhelmingly towards … [Read more...] about Investors, prepare: Australia will abandon its emissions targets
Trump will likely win – but won’t make America great again
He’ll likely win because the U.S. is in a very bad way; but whoever wins will probably fail because what’s undiagnosed remains untreated. Donald Trump will likely defeat Joe Biden at the American presidential election on 5 November. One major reason is well-known but not, in some mainstream media outlets, widely-publicised: for the past several months, multiple organisations’ … [Read more...] about Trump will likely win – but won’t make America great again