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- šÆ Blame the Benchmark
šÆ Blame the Benchmark
The Idea Farm
February 18, 2024
āInvestors are always searching for good ideas, when what they need are good habits.ā
Research
GMO - Magnificently Concentrated: Your active managers are more competent than they lookĀ (10 pages)
As the S&P 500 has become more concentrated over the past decade, fewer and fewer active managers have been able to outperform their benchmark. GMO investigates why and says skilled active managers may perform better if the U.S. equity market becomes less concentrated over the next decade.
"Since 1957, the 10 largest stocks in the S&P 500 have underperformed an equal-weighted index of the remaining 490 stocks by 2.4% per year. But the last decade has been a very notable departure from that trend, with the largest 10 outperforming by a massive 4.9% per year on average."
First Eagle Investments discusses the marketās ups and downs in 2023 and shares why they expect conditions in 2024 to be less sanguine than current market valuations seem to imply.
Bonus Content
Rob Arnott discusses value investing, Nvidia and market delusions. Link
Jason Zweig shares why ignoring the news may help your investment plan stay on track. Link
Nat Bullardās annual presentation on the state of decarbonization told with climate, capital markets, technology, and sector data. Link
āA Hollywood director took millions of dollars of production funding from Netflix and used it to trade stock options and cryptocurrencies.ā Link
This is a great profile of Nvidia & CEO Jensen Huang. It goes back to the origin of the company, near bankruptcies, and how the company has repeatedly disrupted itself. Link
Podcasts
 1/14/24 - 54 minutes | Arjun Murti, Goldman Sachsā former Head of Energy Equity Research, explains why he doesnāt believe it will go as smooth as many are forecasting. |
 1/9/24 - 58 minutes | Former Bridgewater Portfolio Strategist Paul Podolsky shares insights on investment philosophies, markets and geopolitics. |
 1/15/24 - 48 minutes | Weinstein discusses investing in closed end funds, having lunch with his idol Ed Thorp, the role of dry powder and more. |
What Else Is Happening
Did you miss last weekās email?
Meb Faber spoke with GMOās Tina Vandersteel about a possible āonce-in-a-generationā opportunity in emerging market local currency debt.
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