Will The 60/40 Rebound?

“Never take financial advice from someone who has to work for a living.”

–  Nassim Taleb


Man Institute – The Road Ahead: Riddles in the Dark (7 pages)

Man Group with a study on 60/40 portfolio returns and, among other observations, what tended to happen in the second half of the year following big declines.

Three takeaways from the piece:

  1. H1 2022 was the second worst first half performance for 60/40 in more than two centuries: In 79% of years a 60/40 portfolio was positive through to June. Not this time
  2. BUT, when we have had big historic falls, there has tended to be a sharp H2 bounce: In the ten worst H1s (excluding 2022), average performance was -12%. For the corresponding H2s the average was 10%, and the positive hit rate was 90%
  3. Most of the big absolute 60/40 moves (up and down) happened a long time ago. Prior to 2022, there had not been a +20% or -10% year since 1975. A clear marker, we think, of a return to a more volatile market environment.

Bonus Content

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🎨 Wes Grey on why factor investing is more art than science. Link

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🗨️ Cullen Roche on the biggest myths in investing. Link

⚠️ Morgan Housel on protecting yourself during bubbles. Link

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What So Many People Get Wrong About The Energy Transition
[7/28/22 — 51 minutes]
Apple | Spotify | Google

Bernstein analyst Bob Brackett covers the headwinds in the energy transition, why commodities don’t just disappear, and what he thinks on the set up for rubber, mercury, coal, oil & copper.





From The Episode:
“…politicians, regulators, they don’t like coal for its externalities, but they also like cheap electricity for the voting population. “

Don Kohn & Dave Goodson
[7/29/22 – 31 minutes]
Apple | Spotify | Google

For the first 31 minutes of the episode, Jeremy Siegel talks to former fed vice chair Don Kohn about the possibility of a recession, negative growth in the money supply, what they would do if they were Jerome Powell, and more.




From The Episode:
“If I were at the Fed, I would want to see some concrete evidence that it was headed downward…and there was enough slack in product and labor markets to give me confidence that it was going to get back to 2%.”

Solving prescription drug pricing in the US with Cost Plus Drugs
[7/26/22 – 41 minutes]
Apple | Spotify | Google

For the first 41 minutes, Alex Oshmyansky, CEO of The Mark Cuban Cost Plus Drug Company, shares the purpose of Cost Plus, explains why a ‘parallel supply chain’ for medicine is needed, and gives an overview of the lack of transparency of pricing with prescription medicine.





From The Episode:
“The Attorney General of Ohio…released the results of an investigation where they found 1/3 dollars spend by Ohio managed Medicaid … went to PBM (Pharmacy Benefit Manager) spread. So essentially, 1 out of every 3 dollars spent by Medicaid in Ohio went directly to the PBMs.”

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