The median USA household has an amazing lifestyle compared to the world & history.
Median household income in the USA is $80k.
Using the 4% rule, a $2 million portfolio can support that.
Portfolio can be even smaller if the home is paid off, as you don't have rent/mortgage.
4
2
33
3,825
VSG retweeted
I actually think Eisner was a great CEO for Disney. Things went poorly after Frank Wells' untimely and unfortunate death. But Eisner got the company out of the 'What Would Walt Do?' trap and rejuvenated the studio.
Additionally, the Cap Cities merger worked out well. From 1999 to 2018, Media Networks accounted for more than half of Disney's operating income growth (the years were chosen because of ease of pulling data, not trying to cherry pick). Eisner set the company up for massive success with this deal... A lot of which was driven by ESPN, which I don't think was Eisner's core thesis on buying the company, so I don't know how much credit to give him.
He was also the first CEO to push price at the parks--something I think has gone too far and made for a bad experience.
@JamesStewartNYT's DisneyWar (amzn.to/46HQl9f) talks about Eisner's tenure in great depth. It's a tremendous book.
In contrast, I think Iger made the company worse off than he found it.
This is extremely crazy and makes Chapek look nothing but bitter.
I don’t think Iger was awful. I think he was a lot like Eisner. Created a lot of value, but the way he ultimately left colored a good part of his entire tenure.
3
1
35
8,918
This is a defining feature of every bubble. Everyone knows it is BS, but they want to chase the momentum. They all tell themselves they’ll get out in time. Everyone then bails at the first sign of trouble.
That’s why the last stage is so euphoric and the decline is so violent.
I'm 60% through Sorkin's 1929 book, and the most shocking thing is NOT how oblivious everyone seemed to the bubble in the months preceding October '29.
It's how oblivious everyone was in the months following it.
12
24
390
60,053
Automatically target your savings rate. Easiest way to do this is to have your direct deposit go to two places: a brokerage account and checking. Pretend the money going into the brokerage doesn't exist for spending purposes & find a way to live on what's in the checking account.
3
44
4,859
I used to think that financial history was useful for analogs. Something happened in x time period and it's just like today.
That's not really it.
The utility of financial history is expanding your imagination to what's possible. It gets your head out of current narratives.
10
5
102
5,827
Remember the conviction people used to have that rates would never rise? There were narratives explaining it. The government can't do it because of interest costs. Demographics.
Remember this the next time you hear a widespread economic narrative. They're almost always bullshit.
15
8
172
8,051
VSG retweeted
A lost decade isn’t the historical extreme. In Robert Arnott’s stock-vs.-bond data, U.S. stocks failed to beat bonds from 1803–1871, 1929–1949, and 1968–2009. Three multi-decade stretches. The longest lasted 68 years. Stocks usually win, but not always.
For the modern period, the bond benchmark was rolling 20-year U.S. Treasuries.
So many in the comments are shocked at the idea that equities can have a lost decade like it’s totally unthinkable.
This literally happened in the 2000s.
I’m not saying that’s definitely going to happen, but I wouldn’t be shocked if it does.
10
9
59
7,853
VSG retweeted
Looking at the comments, many don't believe stock returns can be that low and many don't believe inflation will ever go back down.
Bonds are the ultimate example of how people are just performance chasing.
Mathematically the 10-year is guaranteeing you a 5% return and all people can look at is the last drawdown. Frankly I’d be shocked if stocks beat 5% over the next 10 years.
9
3
86
21,614
A good stock picker is right maybe 60% of the time.
Most investors are not even good stock pickers.
Think about that next time someone on FinTwit quotes Munger about diversification and puts 50% of their portfolio into a single stock.
5
1
50
4,046
‘Deflation can’t happen because of deficits.’
We’re at 125% debt/GDP. Japan was in the same place in 1999. They had a decade of deflation in the 2000s. Debt/GDP went to 220%. They tried mightily to stop it and could not.
No one can forecast this stuff.
People have very strong opinions about inflation. No one knows what future inflation rates are going to be. A deflationary recession could happen next year. A ‘70s stagflationary scenario could also happen. Literally no one knows, so own diversifiers for both.
6
1
52
8,140
People have very strong opinions about inflation. No one knows what future inflation rates are going to be. A deflationary recession could happen next year. A ‘70s stagflationary scenario could also happen. Literally no one knows, so own diversifiers for both.
11
1
51
14,093
So many in the comments are shocked at the idea that equities can have a lost decade like it’s totally unthinkable.
This literally happened in the 2000s.
I’m not saying that’s definitely going to happen, but I wouldn’t be shocked if it does.
Bonds are the ultimate example of how people are just performance chasing.
Mathematically the 10-year is guaranteeing you a 5% return and all people can look at is the last drawdown. Frankly I’d be shocked if stocks beat 5% over the next 10 years.
38
9
426
47,907
Bonds are the ultimate example of how people are just performance chasing.
Mathematically the 10-year is guaranteeing you a 5% return and all people can look at is the last drawdown. Frankly I’d be shocked if stocks beat 5% over the next 10 years.
It's getting to the point where trying to convince someone he or she should own bonds is like trying to convince someone to own energy in 2020
74
11
678
199,298
‘Treasuries won’t work as a diversifier because we could have a debt crisis, USD could lose reserve currency status, etc.’
Brother, what do you think happens to every other financial asset on the planet if something like that actually happens?
That’s what gold is for.
12
1
90
7,318
VSG retweeted
There’s really nowhere to hide when big drawdowns happen. A lot of value investors think their stock picking somehow makes them immune to what’s happening in the broader market, but that’s not right either.
14
3
51
33,501
This is a reason I got into asset allocation. In the backtests, I could not assemble a portfolio of stocks that survived 2008-09 without massive losses.
You need other assets for these things. Treasuries, in particular.
There’s really nowhere to hide when big drawdowns happen. A lot of value investors think their stock picking somehow makes them immune to what’s happening in the broader market, but that’s not right either.
25
2
149
33,965
Investors knew why the stock was cheap in the 1970’s, too. Stocks never got cheap randomly.
The reason value still works is that expectations get low enough and the company fundamentals surprise to the upside.
And, yes, it still works.
Value investing worked because information was scarce. Today, if a stock is cheap, there's a reason, and the reason is terrible:
Alix Pasquet (@alixpasquet), managing partner of hedge fund Prime Macaya Capital Management, explains:
"Value investing taught you to look at things bottom up. You look at the business, and that's it. And that wasn't because Graham or Warren were bad at understanding an industry. It's because back then, they didn't have access to the information we have now."
"One of the reasons value investing worked really well is you could buy something cheap that was very good, and no one knew it was good, because there wasn't enough information on it."
"But today there's so much information that if something is cheap, usually there's a really good reason why it's cheap, and that reason is terrible."
"You're not gonna have a really good athlete trade cheaply for a short period of time. People are gonna know."
"I look at certain long-only, quality-focused investors and say, I bet you 100 bucks to a hat pin that Visa or MasterCard are in that portfolio. And yes, it is. The cat's out of the bag."
"But guess what happened this year? Quality took a dive, a really big one. It's gonna take those guys a couple years, if not five, to dig themselves out of that. It's gonna be painful."
13
3
135
17,074
Paid mine off.
Tremendous peace in knowing I could lose my job and pay all of my bills delivering pizza if I had to.
Also nice not giving two fucks what happens with housing prices or mortgage interest rates.
If your mortgage costs $2,000 to $5,000 per month, just think what you could do with that money if you had a paid off mortgage. Still care about that 4% rate or would you rather have the cash? It’s not just about math.
58
4
563
108,291