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This Week on The Compound
This Week on The Compound
This week on TCAF, Josh and Michael were joined by high-profile investor Steve Eisman. They discussed behind-the-scenes on The Big Short, what's going on with the trade war, what looks good in financials, the labor market, and what's happening at Apple. (Listen)
OUTSIDE THE COMPOUND
The drumbeat around private assets in retirement plans, wealth management portfolios, and individual investor accounts is deafening. Recent data shows that past returns to private equity have not been all that great. Questions have also arisen around fees. And the Yale University endowment is reducing its exposure. Check out this summary of recent research by Richard Ennis via Verdad Advisors.
Ennis argues that the heavy reliance on alternative investments has not only failed to justify its cost but has actively degraded institutional performance—especially post-GFC. The primary reason for this underperformance is simple: alts are just too expensive. He references Lim (2024), who finds that private market investments typically incur a cost drag of 5% to 8% per annum, reflecting fees and carried interest. This implies a near-insurmountable hurdle for these assets to generate excess return.
INSIDE THE COMPOUND
There is no shortage of financial advice out there, from financial television to blogs, YouTube, and TikTok. Some of it is good, some of it is downright dangerous. Barry Riholtz on the question you should ask yourself anytime you consume financial advice.
Before you accept the investing advice from a random stranger, ask yourself if they are concerned with your comfortable retirement, buying a new house, or paying for your kids’ college. If they don’t know your zip code or tax bracket, how on earth can their advice be geared to your specific circumstances?
MERCH
New Summer merch is here! Including a dope The Compound beach towel. Check it all out at idontshop.com.
COMING SOON
This week on TCAF, Josh and Michael will be joined by Todd Sohn, Senior ETF & Technical Analyst at Strategas Securities, and Matt Cerminaro, Chief Product Officer at Exhibit A.
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