Along with Warren Buffett, the lesser-known half of the dynamic duo that has piloted Berkshire Hathaway for so many years is Charlie Munger. Munger recently spoke some truths out loud that many C-suite executives have been thinking to themselves, but failing to express. The problem Munger highlighted is one already known to readers of Your Survival Guy, activist (not to be confused with active) index funds. These are funds that vote the shares (investors' shares) in an effort to push a political agenda. The Wall Street Journal's editorial board describes Munger's comments, and expands on them, … [Read more...]
You Invest, They Win
The founder of the largest hedge fund in the universe, Ray Dalio, tweeted this from Burning Man:
Just back from Burning Man. Reminds me of Woodstock with better art (installations) and less good music. What a great vibe and what amazing creativity!
Photo is with my pal and coworker Jeff Taylor at his great music camp Root Society. If you go next year, 1-5am is best.
Are these the guys you want running your money? You invest, they win. But hey, it’s not about the money. It’s about saving the planet man.
Because if it’s about the money (Dalio has a personal net worth of $19 billion) then this hedge fund lost to a boring Vanguard fund that uses a conventional mix of 60% stocks and 40% bonds.
The article doesn’t come out and name the fund, but perhaps you, as a long-time reader of our websites, know the name: Vanguard Wellington.
You might also know what Vanguard founder, the late, great, Jack Bogle, meant when he said: “The grim irony of investing is that we investors as a group not only don’t get what we pay for, we get precisely what we don’t pay for.”
The captains of the investing universe are living their “best life” at whose expense?
Yours, of course. You invest, they win. Read more below.
On Tucker Carlson Tonight, Vivek Ramaswamy explains what he calls the "defining scam of our time." He's referring to the use of investor money by BlackRock and other money managers to push the goals of what he calls the "woke industrial complex." Of course, Your Survival Guy has been warning readers about BlackRock and its high fee, biased ESG programs for years. Here's a sample: You Invest, They Win: ESG Is a Money Grab BlackRock Has Two Sets of Rules for China and America BLACKROCK’S BILLIONS: Guess Where Those ESG Fees Are Going? Index Funds Put Politics Ahead of Shareholders … [Read more...]
Question: do alternative investments belong in your portfolio? Read this op-ed with care because it’s exactly how Your Survival Guy feels about alternative investments. All’s fine and good until you need your money back and you realize they’re not exactly liquid or what you were sold. Hunter Lewis writes in The Wall Street Journal: Venture and buyout funds are hugely popular—and also imperiled by ethical and other problems. I have a long history with such funds. As an adviser to Yale in the 1970s, I recommended that it make its first venture-capital investment. I gave similar advice to … [Read more...]
Recently, The Wall Street Journal's Juliet Chung reported the story of Gabe Plotkin and Melvin Capital Management's massive losses incurred in 2021. Here's one paragraph that drew Your Survival Guy's attention: Melvin charges investors an annual management fee of 2%, and takes a cut of up to 30% of all profits, among the highest incentive fees in the industry. That can be extremely lucrative in profitable years, but the economics tend to be punishing on the way down. Like most hedge funds, Melvin must first make back all of its losses before it can resume taking incentive fees from investors … [Read more...]
UPDATE 1.25.2022: Things are getting choppy in the markets. Now more than ever is the time to focus on building a portfolio of income earning stocks and bonds that will help you weather the storm. If you need help with that, I would love to talk with you. Originally posted September 30, 2021. Look, I know a lot of you own Mutual Funds and ETFs, especially if you’re wrapped up with an advisor where you invest, he wins. Today, there’re maybe a handful of funds I’d put my own money into, and the same probably applies to yours. The problem is, once you set sail, it’s hard to change course. … [Read more...]
Your Survival Guy is no fan of cryptos especially with actors like Matt Damon cashing in where you invest, but they win. Now the price of bitcoin has dropped below $40,000 as it becomes increasingly correlated to the performance of tech stocks. The Wall Street Journal's Caitlin Ostroff reports: It is becoming a more common occurrence: When stocks fall, so does bitcoin. Bitcoin, the world’s largest cryptocurrency by market value, fell below $38,000 Friday to its lowest dollar value since August 2021, according to CoinDesk. It later regained some ground and was trading at $38,705.70, down … [Read more...]
Chinese investors are still being paid for their investments in Evergrande, thanks to the Chinese government. But can foreign bondholders count on the communist government to save them as well? Never underestimate the vengeance a government will take against the investor class where you invest and they win, or at least don’t lose. Foreign bondholders have claims to a number of Evergrande’s offshore assets in the event that the company cannot repay them, including the company’s property management arm and an electric vehicle startup that Evergrande founded in 2018. Some analysts have said … [Read more...]
Your Survival Guy doesn’t invest in SPACs, which carve out a fortune for the founders, where you invest and they win. SPACs became very popular during the COVID-19 pandemic, but seem to be losing favor fast. Amrith Ramkumar reports in The Wall Street Journal: SPACs, or special-purpose acquisition companies, burst onto the scene in 2020 as the hip way to take Silicon Valley’s hottest startups public. Unlike traditional initial public offerings, SPACs were seen as modern and accessible, allowing any investor to put money into the companies of the future at the same time as professional money … [Read more...]
BlackRock now manages over $10 trillion in assets. Its funds are among the three largest shareholders in more than 80% of the companies in the S&P 500. In speaking about CEO Larry Fink, David Rubenstein, the co-founder of the private-equity firm Carlyle Group Inc. said, “Treasury Secretaries and finance ministers come and go. They work for someone else who can fire them tomorrow and have to build what others want them to. When you are the CEO of the biggest asset manager, you don’t have to do that.” So when you become THAT BIG, doesn’t life get boring? What’s next? Another jet, or a … [Read more...]
When interest rates are nailed to the floor, business must go on. Hence the creation of ESG funds, and a whole new market is created to generate more fees for fund companies. WSJ reports: Few private citizens wield more power in America today than Larry Fink, the chief executive of BlackRock Inc. In pushing companies to embrace climate-friendly policies, that has made him a lightning rod. The firm he runs manages some $10 trillion for pension funds, endowments, governments, companies and individuals, equal to more than 10% of the world’s gross domestic product in 2020. Its funds are among … [Read more...]