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Weekend reading: System addicts

What caught my eye this week.

Those of you who frequent the naughty side of town – indulging in active investing despite being clued-up followers of a website that urges a passive approach – will enjoy Conor Mac’s reflections over on Investment Talk this week.

Why doesn’t he just sell all his individual stocks and go buy an ETF, Conor asks?

He’s no dummy. He knows the odds against outperformance and understands that:

To a layman, an investor’s dedication to beating the market over their lifetime appears absurd. The trade-off, time spent doing other things, is huge.

We each have a finite amount of time on this earth. To spend countless hours which I assume add up to years of one’s life, only to underperform the market, may appear wasteful. Insanity is repeating the same thing hoping for different results. Consider the aggregate of individual investors trying to beat the market. Most will fail.

Thus, on the aggregate level, these people look crazy.

So why indeed?

But for the benefit of newer readers –  please know that I’m not judging.

I’m an active investor myself, and long ago debated the reasons why with my sensible and purely passive co-blogger.

Five star generalisations

Moreover something I love about the active investors among our Mogul membership is how self-aware they (you?) seem to be too.

Of course we’ve filtered hard for this kind of member. Both by sneaking them in through the backdoor of a blog about using index funds and also by stressing Moguls will not be promising Five Stocks To Pay For Your Porsche or the like.

I’m also aware that more than a few Moguls members just wanted to send a few extra quid our way, despite being entirely passive investors themselves. For which, enormous thanks!

Anyway, the end result is I don’t get the impression that our members expect easy or even especially probable wins.

Rather, active investing for them is a challenge or a passion or a hobby – but one with the tantalising if slim potential to deliver life-changing results on the side.

Indeed it’s possible Moguls will turn out to be a multi-year version of Conor’s reflective post.

For my part, active investing – stock picking – has been an endlessly fascinating game, that’s also gamified my wondering about the world around me. For most of the time I was fortunate that it was more profitable for me, too, though as I’ve conceded elsewhere the last 18 months has been testing that one hard.

Perhaps for you there are different motivations?

Or more likely you’re one of the Monevator majority who’s sensibly all-in on a global tracker fund and you think we’re crazy.

Which is more than fine, too, if expressed politely. Broad church here!

Active addicts should go feel seen at Investment Talk. I hope the rest of you enjoy cracking into this week’s links below.

Best of luck to Wales, England, Scotland, and Ireland in the games today!

From Monevator

The Slow & Steady Passive Portfolio update: Q3 2023 – Monevator

How to enjoy life like a billionaire – Monevator

From the archive-ator: How unmarried couples can protect their finances – Monevator

News

Note: Some links are Google search results – in PC/desktop view click through to read the article. Try privacy/incognito mode to avoid cookies. Consider subscribing to sites you visit a lot.

Buyer’s market fuels fastest fall in UK house prices in 14 years – Guardian

Troubled Metro Bank kicks of £3bn mortgage book sale – Sky

Portugal to scrap ‘unjust’ tax breaks for foreign residents – Guardian

Bed bugs threat from Paris? They are already here, say experts – Sky

London has just been named the best city in the world – TimeOut

Families should have more children to care for elderly, says minister – Guardian

Top 10 places to retire in the UK, rated – Which

Why a rout in global bonds is worrying – Reuters

Products and services

Starling Bank boosts current account interest to 3.25% – Which

NS&I pulls top fixed 6.2% savings rate after 225,000 sign up – This Is Money

Blackrock launches the first defined-maturity TIPS ETFs [US but notable]ETF.com

Open an account with low-cost platform InvestEngine via our link and get £25 when you invest at least £100 (T&Cs apply. Capital at risk) – InvestEngine

Simple trick to secure best buy Natwest easy access account rate of 5.2% – This Is Money

British Gas extends half-price electricity on Sundays offer this winter – This Is Money

Get £50 free trading credit when you open an account with Interactive Investor. Terms apply – Interactive Investor

What’s happening with buy-to-let mortgage rates? – Which

Homes for sale with a blue plaque, in pictures – Guardian

Comment and opinion

Seven beliefs about money – Of Fortunes & Frictions

At long last, bonds once again matter – Morningstar

How to make the right type of withdrawal from your pension [Search result]FT

I’m wealthy if I can… – Thomas Kopelman

Five years of FIRE. Was it worth it? – Far and Wide

Retiring to a cabin in the woods – Financial Samurai

Can you make money ‘stoozing’ with a 0% credit card? – Which

The thin line between bold and reckless – Morgan Housel

Even a successful financial life will take a few hits – Humble Dollar

Asset class CAPM – Verdad

Three things investment people hate to admit – A Wealth of Common Sense

Charted: retirement age by country [Infographic]Visual Capitalist

Naughty corner: Active antics

The importance of an economic moat – Flyover Stocks

Ruffer’s recession red flags and four moves to protect against them – Trustnet

Looking for an edge – Humble Dollar

Saddling up for the unicorn massacre [Search result]FT

The top 40 high-yield blue chip UK stocks – UK Dividend Stocks

Kindle book bargains

The Simple Path to Wealth by JL Collins – £0.99 on Kindle

Mastering the Market Cycle by Howard Marks – £0.99 on Kindle

The Power of Moments by Chip and Dan Heath – £0.99 on Kindle

Think and Grow Rich by Napoleon Hill – £0.99 on Kindle

Environmental factors

September 2023 hottest on record by ‘extraordinary’ margin, say scientists – Sky

Cheap heat pumps on offer from energy firms – This Is Money

Britain’s greenest banks – Which

10,000 ‘superhero’ oysters seed a new offshore reef in the North East – ZSL

Are we outsourcing pollution? – Klement on Investing

Countries pledge $12bn to fund coral reef protection – Reuters

Robot overlord roundup

Excogitation – Indeedably

The AI boom-bust – Dror Poleg

Unbundling AI – Benedict Evans

Hallucinating machines [Search result]FT

Off our beat

“Managed decline“: the uncertain future for British rail after cuts to HS2 [Search result]FT

Respect and admiration [Podcast]Morgan Housel

The nuanced impact of working from home on productivity – The Hill

The truth is always made of details – Raptitude

Fooling ourselves – Seth Godin

Are you old, globally-speaking? [Interactive tool]Population.io

How a big pharma company stalled a potentially lifesaving TB vaccine – ProPublica

Discover your innate personality trains [Fun personality quiz]Taiwan Design Expo

Full-time children: the 20-somethings who never grow up – Guardian

And finally…

“Money is, in other words, an entirely social phenomenon. If Jeff Bezos was to avoid a nuclear war by escaping to a bunker on his secret island lair and then emerge a year later as the only surviving human on earth, his billions of dollars would be of no value whatsoever; with no one to trade with, money is useless. Imagine he then wandered the earth and came across a primitive Pacific tribe that had somehow survived, and who exchanged value by sharing the prettiest shells they can find. Jeff could show them wads of paper with pictures of Benjamin Franklin on them, but it wouldn’t get him very far.”
– Rob Dix, The Price of Money

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The post Weekend reading: System addicts appeared first on Monevator.

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