The Idea Farm
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🎯 Blame the Benchmark

🎯 Blame the Benchmark

The Idea Farm
February 18, 2024

“Investors are always searching for good ideas, when what they need are good habits.”

Jason Zweig

Research

GMO - Magnificently Concentrated: Your active managers are more competent than they look (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 - First Eagle Reflections 2023-2024 Edition (52 pages)

First Eagle Investments discusses the market’s 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 Bullard’s annual presentation on the state of decarbonization told with climate, capital markets, technology, and sector data. Link

“A Hollywood director took millions of dollars of production funding from Netflix and used it to trade stock options and cryptocurrencies.” 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 - “We’re in the midst of MESSY energy transition”

Arjun Murti, Goldman Sachs’ former Head of Energy Equity Research, explains why he doesn’t believe it will go as smooth as many are forecasting.

Apple | Spotify | YouTube

1/9/24 - 58 minutes

Paul Podolsky: Markets, Geopolitics

Former Bridgewater Portfolio Strategist Paul Podolsky shares insights on investment philosophies, markets and geopolitics.

Apple | Spotify | YouTube

1/15/24 - 48 minutes

Billionaire Boaz Weinstein’s Winning Strategies In A Volatile Market

Weinstein discusses investing in closed end funds, having lunch with his idol Ed Thorp, the role of dry powder and more.

Apple | Spotify | YouTube

What Else Is Happening

Did you miss last week’s email?
Meb Faber spoke with GMO’s Tina Vandersteel about a possible ‘once-in-a-generation’ opportunity in emerging market local currency debt.
- Listen on iTunes
- Listen on Spotify

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