Insights on markets, emergent trends, history, innovation, risk management, global economics, strategy, policy, and other topics that catch our attention. Inspired by ongoing research, conversations and events. Written and edited by Osbon Capital Management and published every Thursday morning.
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2024 will bring more positive novel surprises. New years always do. In 2023, it was the dramatic acceleration in AI, which touches nearly every industry, and the early stages of an answer to the obesity epidemic with GLP-1s. Here is a list of what’s on our minds going into 2024.
Peak Passive? Not so fast.
The FT ran a story this week asking if we’ve hit “peak passive.” Similar to peak oil, peak “X” refers to an asset class hitting a sort of critical mass or market saturation. It also vaguely implies that there is no more room to grow and down is the only direction possible. With millions of investors relying on portfolios of passive index ETFs, this could be a mass catastrophe in the making. Or is it? Let’s take an objective look at the perils and possibilities of passive.
Determining your liquid assets
Between boomers wrapping up careers and entrepreneurs thinking about new ones, many are considering retiring from current roles to follow other pursuits, passions and opportunities. For these folks, a critical question is how much cash to hold. Cash reserves provide a sense of security, a buffer against a challenging investment climate and dry powder for interesting one-off opportunities. How much is enough? Is there such a thing as too much? The answer is often a dynamic moving target. Here are some considerations:
The Case For India
India has been getting favorable headlines this year because its prime minister is considered progressive and because its stock market is doing well. The Indian Sensex is up 430% since 2008. India is not exactly a favorite market yet but it has been doing better than many markets in the world. Is it time to invest? Time to hold on for the long term? Let’s look at some basic investment facts about India.
The Incredible Shrinking Market
The New York Times published a feature article last week on our shrinking US stock market. It’s true that the number of publicly listed US securities has dropped from over 7,000 in 1996 to fewer than 3,800 today. That sounds like an economy that’s becoming less diverse, less innovative and less competitive. Is that really the case? Are these numbers a warning sign for investors? Let’s sort it out with some added context:
How Big is Too Big?
Apple made headlines around the world last week when it crossed the $1 trillion dollar market value level. Apple’s value now begs the question, how much higher can it go? Is $2 trillion feasible? How about $4 trillion? Or has Apple grown so large it will begin to fade? Is the trillion dollar mark a limit or a launchpad?
Four Books for Your Summer Reading List
I chose these books to address four themes that I think are valuable for successful investors. The first will help boost your optimism by viewing our progress as a society through a broader lens and a fresh perspective. The second will inspire you to be more effective when getting together with people to share ideas, investment or otherwise. The third, one of Warren Buffett’s all-time favorite investment books, will help you focus on the most effective attributes of a successful CEO. The last, by my favorite futurist, a local Boston VC, will expand your view on the real-life science fiction that is happening today in biology and genetics. Read more to see how these relate back to investing.
Mid-Year Check Up
Where were we one year ago? Have your investments gained value or slid? It’s hard to keep track when economic and political news is so loud. We’ve had two years of market anxiety – from Brexit and nominee Trump to tariff trade wars and non-stop interest rate increases. Fears persist. So let’s take a mid-year time out and figure out which way is up.
The Perils of Pessimism
In 2010 I got two client inquiries to create an “Armageddon Portfolio,” a collection of assets that would hold its value come hell or high water. Recall that we had just pulled out of the financial crisis. Many expected a repeat. For some, pessimism was so high in 2010 there was no expectation for an increase in asset value; just maintaining value was plenty. What happened next?
6 Features I’d Add To The Financial Industry
In 2013 Google’s New York office ran an experiment that replaced the normal glass M&M containers with opaque containers labeled “M&Ms.” Within seven weeks the 2,000 person office’s consumption of M&M’s had dropped by over 3.1 million calories. Without changing our willpower or discipline, we can control our healthy habits with simple changes to our environment. We should be able to do the same with our financial health by making small tweaks to our financial environment. Here are six M&M/Google inspired features I would add to our financial lives:
