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The Stingy News Weekly: 10/07/2023 Stingy Links Starting late "What would our financial situation be if we retired and our only income was Social Security? That was entirely possible. My employer's pension plan had been woefully underfunded when I began working there. Future pension benefits were far from certain. Meanwhile, my wife's employer had recently been sold, and the new owner had no pension plan." [Retirement] If you're not confused, you're not paying attention "bond markets act as if they think inflation can be extrapolated. Long-term interest rates tend to be high when the last decade's inflation was high. US long-term bond yields, such as the ten-year Treasury yield, are highly positively correlated (70% since 1913) with the previous ten years' inflation. But the correlation between the Treasury yield and the inflation rate over the next ten years is only 28%." [Bonds] International value "While value stocks have provided higher returns than growth stocks, like all strategies that invest in risky assets, value investors experience long periods of underperformance. Such periods test investor discipline. Sadly, it is my experience that while economists know that when it comes to risk assets, returns over periods of 10 years or even longer are likely to be just 'noise,' most investors think that three years is a long time to judge performance, five years a very long time, and ten years an eternity. That belief leads them to sell after periods of underperformance. This is even though such periods generally result in asset trading at historically cheap levels." [Value Investing] Between bold and reckless "If success requires taking risk that could easily turn into failure, and the line between the two is nearly invisible in real time, I want to learn from people who accidentally stepped over the line and lived to tell the tale. Companies that survived deep recessions. Investors who survived bear markets. Products that flopped, were redesigned, and then worked." [Bahaviour] One less vulnerability "Many of the relationships we have come to know and love (oil vs. USDCAD, Aussie vs. Terms of Trade) have broken down as transmission mechanisms have changed." [Markets] House of cards "what intrigues me is why people end up with horrifying card balances. On the way to five-figure or six-figure card debt, you have to imagine there's a moment or two when cardholders think, 'Maybe this is getting out of control. Maybe it's time to stop spending.' And yet they don't." [Behaviour] S&P/TSX60 Value Screens
DOW 30 Value Screens
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