Hi all and thanks for the patience! I’m afraid you’ll have to be patient for just a bit more while I ramble on why I haven’t been rambling. I haven’t blogged for quite a while and as I’ve told everyone who asked there were two major reasons:
- We had 2 children since the last post (so now a 2- and a 0-year-old), new job, some big renovations on our house and tons of other stuff that I’ve shared with whoever asked (yeah, I know, excuses right) I just didn’t have much free time and had to prioritize it strictly.
- The main purpose of the blog is really to help me document information I find that help drive my investment strategy and I have been quite happy with having it on autopilot for a while since I read no new information that fundamentally impacted my choices (yeah I know this is shamelessly self-centered).
The first statement is still true and I probably won’t regain much free time where I’ll value blogging over family time in the next 10-12 years but the second point has changed. Without going into detail yet (I will later of course) the offending new information is a now oft cited publication by Bessembinder in 2018 (Do Stocks Outperform Treasury Bills) that seems to suggest that just 4% of US stocks provide nearly all the total US market growth and that just 0.36% of stocks provide half the total growth. That means I’ll have a few blog posts to write on both how this will impact my strategy if at all and then if I arrive at a new strategy then probably a post on that. Some of what I’ll write here I’ve probably shared with a number of you guys already in direct messages on reddit, email etc. but for posterity I like having the info on here in a collected format. In order to lay a foundation for exploring alternative strategies I’ll first start by outlining a few inefficiencies on index funds that might not be known to all – the funds themselves certainly don’t publicize their inefficiencies but if their customers don’t care enough to dig, then why would they.
Some other minor info
The site was hacked earlier and I had to restore an old backup. I’ve tried cleaning it back up and restoring some content by finding it on the wayback machine over at https://archive.org/. I restored some comments too, but might have missed some and all the avatars have suffered – I hope this is okay with you all. I’ll try doing better backups in the future but again my time is limited and I’m a bit cheap with hosting this site (you know savings rate and all).
Given the limited time my posts might be a wee bit less researched and well written. I hope you’ll bear with me and I will try to update them if anything comes up in the comments. Given that premise of revision and limited time I’ve also set up a wiki over at firedk.com/wiki and so I will try to populate that and keep it more updated where these posts will generally all be in the context of the time they were written. You are all welcome to chime in on the wiki but I’ll try finding time to get some pages set up and get it going.
I used to frequent r/dkfinance over on reddit (and I still will) but recently it has become crowded and there are tons of repeat questions asking for investment advice for “aktiesparekontoen” and asking the same tax rules daily so I might not be as active there going forward.
I also have technical debt on the blog. I’ll have to try to get it over on https, will have to get working automated backups up and running and then I’ll probably be looking for a better overview of all posts rather than having to scroll down vigorously on the blog front page. If any of you know a good backup tool or a plugin, widget or similar for a page overview please let me know 😉
Welcome back! I’ll surely look forward to reading your blog again, sparse postings or not.
Congratulations on the non-financial accomplishments. Hopefully the little ones will serve you well 😉
I’d be very interested in hearing further thoughts about Bessembinder’s study.
Speaking of /r/dkfinance, I find it interesting how many new investors are flocking to the sub these days. Perhaps it’s a warning sign that overheating and euphoria has kicked in after an incredible stock market year?
Best,
herp
Thanks for the kind words! I think I ‘serve’ them more than the opposite, but they are joy-spreading little critters for sure 🙂 And good to hear from you – I always value your comments as I have probably expressed before.
I’m still trying to come to conclusions on Bessembinder before writing out that post but some of the things to consider are: The single stock strategy that I’ve been running might be at larger risk that I thought (although I did know there were large risks), even index funds / general market performance might not be as attractive as I thought since the risk premium for stocks that we generally accept as truth might not be as significant/safe since it’s largely based on very few stocks, our risk models are (probably) not accurate in modelling risk as average expected gains and standard deviation since those averages are not based on a normally distributed outcome. I’m happy I find this interesting and enjoy spending time reading and digesting this stuff – otherwise I might just buy a cheap ETF and be better off in the long run 😉 In general I think Bessembinder has actually given me a greater appreciation for those that have built real-estate empires ground up – that is tangible, that is buying actual income producing assets, rather than relying on “The market always goes up” despite lacking proof other than “it has so far”. Though I don’t have the interest to do that myself and it’s probably also more difficult in Denmark.
And yeah all the new questions on r/dkfinance could be a sign in the same way as the Rockefeller/Shoe Shine Boy anecdote or it could just be that the younger generation are are exposed to more personal finance in a world where they are expected to live perfect lives in every way and where they are exposed to many times the information input we were. Or it could be a host of other things – I’m not an expert on either, but I struggle to get through reading most new posts bar comments on the subreddit any more where I used to comment on most 🙂