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The Benchmark

Buffett hoards cash as ‘Trump Bump’ hits markets

November 18, 2024

America goes red, markets go green

Dear Reader,

I wrote to you recently about an oft-overlooked Austrian economist who believed that every stock purchase was not just a bid for personal profit, but a vote cast in the economic democracy of the free market.

If that is so, then the days since Donald Trump won the United States presidential election have shown us very clearly what the market wants.

This is how the biggest financial markets in the world are looking as of this morning (performance for year to date):

S&P 500: +23.7%

NASDAQ: +26.5%

Bitcoin: +145%

Say what you want about Trump and the incoming administration; you simply cannot argue his victory has not been good for stocks.

This week, The Benchmark takes a look not just at what’s happened in the weeks since this latest election, but at what happened after Trump’s previous win — and what some of the market’s most influential voices are calling for in 2025 and beyond.

The ‘Trump Bump’ 2.0

History doesn’t repeat, yet it often rhymes.

In 2016, Trump won the U.S. election for the first time.

Fewer people expected it then than this time.

But the stock market conditions were similar.

The S&P 500 was making new all-time highs. As you can see in the chart below, it took off to even higher ones post-election.

The 2016 Trump Bump

This time, it’s a similar setup.

Stocks had made new all-time highs in the run-up to this election, and now appear to be off to the races — and making the late-2016 rally look trivial by comparison given the stock market’s performance since 2016.

The S&P 500 crossed 6,000 points for the first time.

The NASDAQ crossed 19,000 for the first time.

And, love it or hate it, Bitcoin has gone ballistic, up 32% in the past month alone.

‘Larger than 2016’ — JP Morgan

JP Morgan Chase & Co.’s head of US market intelligence wrote in a note to clients last week ‘I expect 2024 returns to be larger than 2016’.

The bank expected the big tech stocks to push the markets even higher, with financial stocks outperforming the rest of the S&P 500 for the remainder of 2024.

This post-election rally, they said, would be even stronger than in 2016, due to three main factors:

✅ Corporate tax cut promises

✅ Expectations around deregulation

✅ Increased infrastructure spending

Investors seem to feel more confident about a Trump presidency than they did in 2016. The market will tell us, in time, how these bets play out.

Crypto storms the senate & house

As I write this, Bitcoin has just hit $90,000 for the first time.

The last time the original cryptocurrency went this crazy, it topped out at about $70,000 in late 2021.

The crypto world has made its Trump vote very clear.

The industry reportedly spent more than $100 million on backing crypto-friendly candidates this election — a sign the once fringe financial-tech movement is maturing and finding more traditional ways to establish itself in the mainstream.

Not only has Trump promised to put America at the centre of the digital asset industry, to appoint more crypto-friendly regulators, and indicated he wants to create a national strategic Bitcoin reserve…

But the senate and house representatives the crypto world backed will shortly be displacing less favourable counterparts in the country’s halls of power.

But, there’s two sides to every story – especially when things get extreme.

Buffett keeping (lots of) powder dry

Warren Buffett’s Berkshire Hathaway is one of the biggest investors in the world.

But it’s worth noting that the company has never kept so much cash out of the market as it’s currently holding back.

They have about $325 billion in cash and treasury bills on their balance sheet — money they believe is wiser kept out of the stock market, even as it melts faces with new high after new high in the wake of the election result.

The Wall Street Journal notes that this amount of money could buy all but the most valuable 25 or so listed companies in the U.S.

While stocks have been climbing since late 2022, Berkshire Hathaway has been growing its cash stash:

Source

Long-term investors know there’s few better veteran investors to pay attention to when markets get extreme.

Dawn of a golden era? Or unsustainable rally?

Tom Lee from independent financial research firm, Fundstrat, thinks there’s more to this market rally than a short-lived post-election party.

He’s raised his S&P 500 target to 7,000 for 2025 — about another 16% higher from current levels.

Lee points to several factors:

✅ Resilient corporate earnings

✅ Expectations of further Fed rate cuts

✅ The potential for increased fiscal stimulus under Trump

The kicker here, is that the market is doing something it’s only done twice in the last 80 years:

It’s up over 20% year-to-date and sitting at all-time highs in November.

The last two times this happened? 1954 and 1958.

The market finished the year higher both times.

Quote of the Week

As a bull market continues, almost anything you buy goes up. It makes you feel that investing in stocks is a very easy and safe and that you’re a financial genius.’

— Ron Chernow

That’s it for The Benchmark this week.

Forward this to someone who’d enjoy it.

If one of our dear readers forwarded this to you, welcome.

Invest in knowledge,

Thom
Editor, The Benchmark

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All information contained in The Benchmark and on navexa.io is for education and informational purposes only. It is not intended as a substitute for professional financial or tax advice. The Benchmark and any contributors to The Benchmark are not financial professionals, and are not aware of your personal financial circumstances.

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The Benchmark

Underground wealth (what I learned ignoring the US election)

November 11, 2024

The man who sold the Arabian peninsula

Dear Reader,

The U.S. election has been and gone.

Given that, by my estimate, probably 75% of the emails in your inbox over the past week have been trying to get your attention by piggybacking on the biggest political moment of the year — and the next four, for that matter — The Benchmark will not be jumping on that bandwagon.

At least not right now.

Today, I want to talk war, oil and gargantuan national wealth.

The kind of that shapes regions, geopolitics and economies for decades and centuries at a time.

Let’s start with the war that changed war forever.

Have oil, will win

One hundred and six years ago today, on November 11, 1918, this was the front-page news pretty much everywhere on the planet:

The New York Times first page on November 11, 1918

World War I was over. About 40 million people were dead, the world order forever changed.

While most modern history focuses on the treaties, the borders, the colossal repercussions resulting from the so-called ‘Great War’, there was another huge consequence — one we very much still live with to this day.

One of the reasons the Allied Powers were able to defeat the Central Powers was that they had access to more oil, courtesy of companies like the Anglo-Persian Oil Company (now BP).

This taught the victors that controlling oil was now a key factor in military might and geopolitical strength.

Add to this the fact that the Great War spurred the once-great Ottoman Empire’s breakup.

The Ottomans had controlled much of the Middle East.

In their place, new states formed in the region; Iraq, Kuwait, Yemen, Lebanon, and others — most importantly for our story today, Saudi Arabia.

The Father of Oil

During World War I, a British Army quartermaster, Major Frank Holmes, was tasked with securing food and supplies for the army’s forces in Mesopotamia (Iraq).

Before the war, Frank, had worked as a mining engineer in southern Africa.

(Coincidentally, he also attended the same high school as I did in New Zealand.)

An oil seep.

So when he heard rumours of oil seeping up through the desert sands down on the Arabian peninsula, he made it his mission to return after the war to confirm what he suspected might be ‘an immense oil field running from Kuwait right down the mainland coast‘.

Return he did.

Frank Holmes spent the following couple of decades obtaining oil concessions and working out where the Arabian peninsula’s oilfields lay — using his straight-talking manner to sell the impoverished sheikhs on the idea of the vast wealth hiding deep beneath their feet.

While most established opinion at the time was pretty negative about the prospects of finding oil there, Frank proved the doubters wrong.

While there might be a common, if ignorant, assumption that those in the Middle East resent western meddling in their resources, the reality is that Frank Holmes’ self-described ‘nose for oil‘ led to a colossal, sustained boom in both wealth and influence for these countries.

The Arabs even have an affectionate sobriquet for Frank; ‘Abu Naft‘ or the Father of Oil.

From no country, to rich country,
to major global tech investor

Riyadh, Saudi Arabia

Spanning an area of more than 2 million sq km, Saudi Arabia is the largest country in the Middle East, and the 12th largest state in the world.

Of all the oil states that Frank Holmes helped create, Saudi Arabia is the one to have cashed in its oil wealth to the greatest effect.

The Saudis possess the second-largest oil reserves on Earth — more than Russia and the U.S. combined, going by Opec’s estimates.

They are the third-largest producer of oil. And current estimates indicate they have nearly 80 years’ production in reserve.

When you talk about Saudi oil, you’re really talking about Saudi Aramco — the national oil company of Saudi Arabia, formerly Arabian-American Oil Company.

Saudi Aramco is the fourth-largest company in the world. It is also the highest-producing oil company — at about 12.8 million barrels a day.

Saudi Arabia’s first commercial oil well, Dammam No. 7

Today, despite not currently being the biggest company in the world, Aramco turns over about half a trillion dollars a year. The Saudi government owns most of the business.

The company’s origin story is stacked with intrigue, intertwined with 20th Century history, and well worth digging into.

For now though, I want to draw your attention to what Saudi Arabia has done with its vast oil wealth.

Fluctuating oil prices, and turbulent regional and international geopolitical developments, make depending solely on oil a volatile strategy.

Eggs in baskets, right?

The government created the Saudi Arabian Public Investment Fund in 1971, right around the time Norway did the same to diversify, distribute and compound its vast — but ultimately finite — oil wealth.

Based on the latest available information, here are the PIF’s top 10 U.S. stock holdings as of Q2 2024:

  • Uber Technologies, Inc. (UBER) — $5.29 billion, 25.62% of portfolio.
  • Lucid Group, Inc. (LCID) — $3.59 billion, 17.37% of portfolio.
  • Electronic Arts Inc. (EA) — $3.46 billion, 16.73% of portfolio.
  • Take-Two Interactive Software, Inc. (TTWO) — $1.77 billion, 8.59% of portfolio.
  • Arm Holdings plc (ARM) — $593 million, 2.87% of portfolio.
  • Linde plc (LIN) — $530 million, 2.57% of portfolio.
  • Cummins Inc. (CMI) — $454 million, 2.20% of portfolio.
  • Advanced Micro Devices, Inc. (AMD) — $374 million, 1.81% of portfolio.
  • Meta Platforms, Inc. (META) — $373 million, 1.81% of portfolio.
  • Amazon.com, Inc. (AMZN) — $296 million, 1.43% of portfolio.

That’s about $17 billion invested across these 10 stocks alone — and that’s just scratching the surface of what the PIF has invested Saudi Arabia’s gargantuan oil wealth into.

You might be wondering how we got here.

From the armistice that ended World War I…

To one of my high school alumni (well before my time, mind you) wandering in the desert looking for army supplies…

To the birth of a group of Middle East nations out of the ashes of a vanquished empire…

To one of the most influential, powerful and wealthy states on Earth…

And the way it’s taking the enormous wealth it pumps from the ground and deploys it in some of the world’s most profitable and fast-growing companies.

Well, for me, it came from seeing this headline:

Story here

Aramco announced last week that its quarterly net profit had fallen to $27.56 billion — slightly higher than the $26.89 billion analysts had expected, but still, remarkably, warranting the negative tone of the headlines broadcasting the result.

While everybody spent the past quarter obsessing over polls and predictions, and now votes and results, from the U.S. election…

This one company was raking in nearly $30 billion in profit, when the state that owns it didn’t even exist 100 years ago.

This got me thinking, which got me writing.

And now here we are.

Quote of the Week

Formula for success: rise early, work hard, strike oil.’

— J. Paul Getty

That’s it for The Benchmark this week.

Forward this to someone who’d enjoy it.

If one of our dear readers forwarded this to you, welcome.

Invest in knowledge,

Thom
Editor, The Benchmark

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All information contained in The Benchmark and on navexa.io is for education and informational purposes only. It is not intended as a substitute for professional financial or tax advice. The Benchmark and any contributors to The Benchmark are not financial professionals, and are not aware of your personal financial circumstances.

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The Benchmark

The perfect tax rate doesn’t exist, or does it?

November 4, 2024


Anti-Taxers on the run in Europe

Dear Reader,

The Cayman Islands. Bermuda. The British Virgin Islands.

You’ve probably heard about such jurisdictions on account of their favourable tax laws, and attractiveness for those looking to protect as much of their wealth as possible.

Tax havens, they call them.

Well, today we’re not looking at a tax haven so much as a tax hell — at least for the very wealthy.

I wrote about this country recently on account of its remarkable sovereign wealth fund, and the lengths it goes to to enrich its citizens by owning a piece of nearly every listed company on earth.

But, this is about the other side of that coin.

Tens of billions taking flight

Norway is not a tax haven.

The land of fjords and oil wealth is experiencing a peculiar phenomenon — its richest citizens are taking their money and escaping south, to Switzerland.

Why?

Because the government recently started demanding a bigger slice of their wealth.

Here are the headlines:


Source

Source

In 2022, more than 30 Norwegian billionaires and multimillionaires bid ‘farvel’ to their homeland.

For context, that’s more than left the country in the previous 13 years combined.

But why the sudden flight?

A double whammy is why.

Prime Minister Jonas Gahr Store has introduced higher wealth and dividend taxes.

Norway is one of the few remaining countries in Europe with a wealth tax.

In 2022, the government decided to increase the wealth tax from 0.85% to 1.1% on the largest fortunes.

On $1 billion, that takes your annual wealth tax from $8.5 million to $11 million.

On top of that, you’ll pay more on any dividends you earn from that wealth.

🇨🇭Going where they’re treated best🇨🇭


Switzerland

Wealthy Norwegians are choosing Switzerland as their escape plan.

The rich, exclusive nation nestled in the heart of central Europe promises much for many, particularly for the exceptionally rich.

While Switzerland also has a wealth tax, the country offers deals for foreigners that can bring the rate down to as low as 0.1% in some cantons.

So that $11 million you’d pay on $1 billion in Norway?

You’d potentially pay just $100,000 on that same amount in Switzerland.

According to Bloomberg:

Store’s tax-the-rich push has pitted traditional Nordic concepts of equality and social justice against claims that the measures penalize success and hurt the economy.

The 63-year-old prime minister has called the emigration of wealthy people “a breach of a social contract”.’

Forcing their wealthiest to flee is hitting Norway’s finances.

Kjell Inge Røkke, Norway’s third-richest man, is among the wealth tax refugees.

His move to Switzerland has cost the Norwegian government roughly $16 million annually in lost tax revenue — more than a million dollars a month.

At the time of writing, it looks like nearly 100 wealthy Norwegians have hit the eject button, and taken their money south to Switzerland.

Wealth creation vs. wealth distribution


Louis XIV: Taxed the people so hard they revolted

As you can imagine, the situation has inflamed an already heated debate.

Erlend Grimstad, secretary of state at the Norway Ministry of Finance, states:

People benefit from free education, national infrastructure, free health care, subsidized preschool child care, generous leave rules, and corporate tax in line with other countries. This means that successful people with this social model should contribute more than others.’

On the other side, the wealth creators argue that the wealth tax forces them to withdraw capital from their companies to pay it, which is bad for growth, business development, and employment.

Tord Kolstad, one of richest 400 Norwegians, says the government’s policy represents a misunderstanding of the nature of his wealth:

My value is not in owning money, it’s in factories, houses, buildings… I still have to pay 2% or 3% a year to the government just to own it. And I believe that this taxation is the reason there will be fewer jobs, and less investment — and then less welfare.’

Now here’s the kicker.

The wealth tax, intended to generate more revenue for the state, might end up doing the opposite.

Norwegian Business School professor emeritus, Ole Gjems-Onstad, estimates that the wealthy Norwegians who’ve left took with them a total fortune of $54 billion.

This exodus could result in about 40% less revenue than the wealth tax currently generates.

Take a look at this:


Source

What this shows you, is that by trying to generate national wealth by taxing private wealth, a country can, in fact, end up making itself poorer.

Which brings us to a nifty little chart.

Who’s Laffering now?

This is the Laffer Curve:


Source

This ‘mound-shaped’ indicator is a method for determining — if such a thing were to exist — the ideal tax rate.

By ideal, I mean one that helps both the government, and the people that government serves, prosper in equal measure.

It takes its name from economist Dr. Arthur Laffer — although the idea first appears in Muslim philosopher Ibn Khaldun’s 14th-Century work The Muqaddimah.

You can dig into the theory behind the indicator here.

But for now, let these excerpts from Laffer’s theories serve to illustrate, at least in part, what’s happening with Norway’s wealthiest right now (my emphasis added):

Higher taxes discourage business activity and drive down tax revenues.

‘For example,
high taxes encourage the creation of tax shelters and encourage business activity that generates paper losses from depreciable assets rather than business activity that creates jobs and generates revenue.

Money spent on plush office suites, the purchase of private jets, and the leasing of luxury cars becomes more advantageous (because of the ability to lower marginal tax rates) than business activity designed to generate a profit.

‘Businesses may tend to
choose to be less productive to be more profitable.’

Benjamin Franklin, the man whose wisdom about investing in knowledge we’ve based this email on, said that nothing could be said to be certain, except death and taxes.

I would add to that by saying that the former, in many ways, is more simple than the latter.

The Norwegians appear to have pushed a little too far along the Laffer Curve.

With capital and wealth more mobile than ever before, the way in which governments treat their highest taxpayers looks like it needs to evolve.

Speaking of evolution…

Brand new Navexa review

Irene Zhu just published her honest comparison of the Navexa portfolio tracker against another popular tool.

This is by far the most detailed, in-depth such video review you’ll see of our platform and everything it helps investors with — including tax calculation and optimization.

Click the player to watch it now:

video preview

Quote of the Week

The art of taxation consists in so plucking the goose as to obtain the largest possible amount of feathers with the smallest possible amount of hissing.’

— Jean-Baptiste Colbert, finance minister to France’s Louis XIV

That’s it for The Benchmark this week.

Forward this to someone who’d enjoy it.

If one of our dear readers forwarded this to you, welcome.

Invest in knowledge,

Thom
Editor, The Benchmark

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All information contained in The Benchmark and on navexa.io is for education and informational purposes only. It is not intended as a substitute for professional financial or tax advice. The Benchmark and any contributors to The Benchmark are not financial professionals, and are not aware of your personal financial circumstances.

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The Benchmark

Print money. Enforce its use. Destroy your economy.

October 28, 2024


Introducing the Einstein of economics

Dear Reader,

You’ve probably heard of John Maynard Keynes and Adam Smith, right?

Towering figures in economic theory.

But how about Ludwig von Mises?

I didn’t hear the name until I went to work for an independent financial research firm renowned for publishing work well outside the investing mainstream.

This overlooked Austrian economist might just be the most important thinker you’ve never heard in terms of understanding capitalist society.

Given that we believe that investing in knowledge is one of the most intelligent things you can do as an investor, I think it’s time I introduced you.

The free market radical


Ludwig von Mises

Ludwig von Mises was an economist, logician, sociologist and philosopher of economics.

Born in 1881 in what is now Ukraine, Mises was the last torchbearer of the original Austrian School of Economics. I’ll dig into the Austrian school in a future email.

Despite his brilliance, Mises spent much of his career as an outsider in academia, often without a paid university position.

He wrote and lectured on classical liberalism and the power of the consumer.

In other words, he was interested in free market economics and civil liberties. He advocated limited government, political and economic freedom, and freedom of speech, with a particular focus on individual autonomy.

He was not a fan of social policies, taxation and state involvement in the individual’s life.

He defended these views as illiberalism and authoritarianism rose in Europe during the 20th century.

While Keynesian economics — which included the idea that government spending could increase economic output — dominated the 20th century, Mises steadfastly defended free markets and criticized government intervention.

The Nazis burned down his library and forced him to flee to the United States in 1940.


Lemberg, Mises’ birthplace, in modern-day Ukraine

Mises made groundbreaking contributions to economic thought, including:

Calling out socialism: In 1920, Mises argued that socialist economies would inevitably fail due to the impossibility of economic calculation without a price system. This insight remains a cornerstone of free-market economics. He also believed a stock market was a guard against socialism.

Austrian business cycle theory: Mises proposed that business cycles are caused by the expansion of bank credit, leading to malinvestment and eventual recession. This theory offers an alternative explanation to Keynesian models.

Praxeology: Mises developed this approach to economics, based on the idea that economic laws can be derived from the self-evident axiom that humans act purposefully to achieve desired ends.

Capitalist society: Mises’ perspective

For Mises, capitalism wasn’t just an economic system — it was the only viable way to organize a complex society.

Here’s why:

The sovereign consumer: In a free market, consumers ultimately direct production through their buying decisions. This “democracy of the dollar” ensures resources are allocated efficiently to meet actual demand.

The entrepreneur as engine: Mises saw entrepreneurs as the driving force of progress. By taking risks and innovating, they constantly improve products and production methods.

The price signal: Prices in a free market convey crucial information about scarcity and demand, allowing for rational economic calculation. This is impossible in a centrally planned economy.


AI rendering of ‘capitalism’

The stock market: Capitalism’s unsung hero

While many people see the stock market as a casino for the wealthy, Mises viewed it as a vital institution in a capitalist society.

He argued that the stock market efficiently directs capital to its most productive uses, as investors seek the best returns.

By allowing ownership to be divided and traded, the stock market enables risk to be spread across many individuals.

Stock prices provide crucial information about the relative value and performance of companies, guiding further investment decisions.

In his own words:

There can be no genuine private ownership of capital without a stock market: there can be no true socialism if such a market is allowed to exist.’

What would Ludwig say about today’s situation?

If you hadn’t noticed, we’re living in an era in which the market practically hangs off government decision-making.

What central banks decide to do with interest rates has a massive impact on what investors decide to do with their money.

While we might feel this is normal, Mises warned against government manipulation of the money supply. He said that such meddling created boom-and-bust cycles.

With central banks around the world engaging in unprecedented monetary expansion, his theories are more relevant than ever.

As governments attempt to direct economic activity, Mises’ critique of central planning provides a powerful reminder of the importance of decentralized decision-making in markets.

Mises’ emphasized entrepreneurial innovation as a driver of progress — not central bank money printing.

Mises’ ideal investor avatar


Ludwig von Mises would have defined a good investor as someone who is:

  • Wary of government intervention in the economy, which can distort prices and lead to malinvestment.
  • Understands that stock prices reflect not just current conditions, but expectations about the future.
  • Recognizes their role as a capital allocator in the broader economy.
  • Appreciates the stock market as a crucial institution for economic freedom and prosperity.

All pretty sound, right? So…

Why does history overlook this man?

Mises’ relative anonymity in popular economics can be attributed to several factors:

His uncompromising stance against government intervention put him at odds with the prevailing Keynesian orthodoxy.

His works are often considered dense and challenging for the general reader.

He lacked the institutional backing that many of his contemporaries enjoyed.

Despite this, Mises’ ideas have had a profound influence on libertarian thought and continue to shape debates about economic freedom and the role of government in the economy.

In Mises’ view, every stock purchase is not just a bid for personal profit, but a vote cast in the economic democracy of the free market.

Quote of the Week

The stock market is the heart of the capitalist system. It is its most characteristic feature. It reflects all the economic conditions of the country and all the circumstances affecting it.’

Ludwig von Mises

That’s it for The Benchmark this week.

Forward this to someone who’d enjoy it.

If one of our dear readers forwarded this to you, welcome.

Invest in knowledge,

Thom
Editor, The Benchmark

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All information contained in The Benchmark and on navexa.io is for education and informational purposes only. It is not intended as a substitute for professional financial or tax advice. The Benchmark and any contributors to The Benchmark are not financial professionals, and are not aware of your personal financial circumstances.

Categories
The Benchmark

Why this bull market might have 200 days left

October 21, 2024


S&P 15,000 by 2030?

Dear Reader,

As we drift deeper into the final quarter of 2024, three financial phenomena are colliding.

We’re nearly two years into a bull market that’s charged higher despite prolonged inflation and interest rate rises.

Now, interest rates are falling.

Corporate earnings are up.

And yet, recession fears linger.

The market is pricing in a recession at 35% probability.

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Thom BennyTwitter Logo
@The_Benchmark_
Not out of the woods. Bears remain close. https://twitter.com/KobeissiLetter/status/1846553207239000329
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@KobeissiLetter
BREAKING: The market is now pricing in a 35% chance of a recession in the US within the next 12 months.
This is down from ~50% seen several months ago but still above the historical average.
Among different indicators, next 12-month Fed interest rate policy expectations imply… https://x.com/i/web/status/1846553207239000329

4:8 PM • Oct 16, 2024
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Plenty of fear. Plenty of greed.

Which will prevail, and for how long?

Right now, there are three distinct visions are emerging for how the stock market might perform for the next 10 years.

As ever, the bull, the bear and the middle ground.

Here they are.

The bull case: Riding the
AI and demographics wave


Fundstrat’s Tom Lee presents an optimistic outlook, projecting the S&P 500 to surge beyond 15,000 by 2030.

That’s more than double its current level.

What’s got this bull so charged up?

Three main things:

Millennial spending wave: Historically, stock market upswings have coincided with growth in the 30-50 age group. Lee sees the rising economic influence of millennials entering their prime spending years driving stocks higher.

Tech filling labour shortages: He expects U.S. tech spending to skyrocket, potentially pushing the tech sector’s weight in the S&P 500 from 30% to 50%. Lee anticipates a surge in technology investment, particularly in AI, to address global labour shortages.

Flood of money into the U.S.: As companies worldwide invest heavily in technology, Lee predicts increased capital flows into the U.S. — strengthening its dominant position as a hub for leading tech firms.

Were these projections to materialize, the market’s annual returns could compound in the high teens. Bullish indeed.

But that’s just one view. What about the other side of the coin?

The bear case: Stagnation
and geopolitical risk


On the other end of the spectrum, some analysts, including those at JPMorgan, paint a more cautious picture, at least for the rest of this decade.

Their concerns include:

Can’t go much higher: Many think current equity valuations are stretched, and that there’s little room left to run higher.

War worries: Prolonged, high-stakes global conflict makes analysts nervous about whether the stock market can continue climbing.

Recession Fears: The Fed has just lowered interest rates, but recession fears remain alive and well. Bears don’t see the economy as out of the woods yet.

Under this scenario, the market might struggle to make gains, potentially remaining range-bound or even declining over the next few years.

Grim. But, like all these viewpoints, far from a sure thing.

The middle ground: Emerging
markets take the lead


Goldman Sachs presents a more nuanced view of what lies ahead for stocks.

They see a shift in global market dynamics, and don’t focus only on U.S. markets.

Key points from their forecast:

A bigger share for emerging markets: They project emerging markets’ share of global equity market capitalization to increase from 27% currently to 35% by 2030. That would be a significantly larger slice of the global market cap, which currently sits around $109 trillion.

U.S. market share decline: While emerging markets could increase their share, the U.S.’s could fall from 42.5% today to 35% by 2030.

India’s leading the charge: Goldman Sachs predict India will have the largest increase in global market cap share, potentially reaching 8% by 2050.

This view suggests that while U.S. markets may not see explosive growth, the global investment landscape could offer significant opportunities, particularly in emerging markets.

This gives you an idea of how far these markets potentially have to run.

In other words, while backing U.S. tech stocks today seems like the smartest play, perhaps that won’t be the case 10 years from now.

Basically, this view is ‘things could change’ — which, to be honest, isn’t much of a view at all.

Give me a strong for or against any day.

Another record high, but for how much longer…

While we’re fans of taking the long view here at The Benchmark, we don’t advocate taking your eye off the ball in the short term, either.

Phil Rosen over at The Opening Bell Daily pointed out last week that, having just hit its 46th record high of the year, the S&P 500 could have the best part of a year left to run to its bull market high.

According to the Wall Street Journal, the market historically takes 709 trading days to hit its bull market high.

This current bull run — which started on October 12, 2022 — is just over 500 trading days old.

That would imply there’s just over six months left of rising stock prices.

If only the past were a reliable guide to future events.

(It’s not — do your own research and understand the risks, always.)

Quote of the week

The individual investor should act consistently as an investor and not as a speculator.’

— Benjamin Graham

That’s it for The Benchmark this week.

Forward this to someone who’d enjoy it.

If one of our valued subscribers forwarded this to you, welcome.

Invest in knowledge,

Thom
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The South Sea Bubble that ruined an entire society’s wealth

October 14, 2024


Newton’s law of speculative bubbles

Dear Reader,

If I told you there was a company whose objective was to wipe out national debt, and that I’d secured a trade monopoly with a vast, rich nation to make it happen…

Would you be interested in investing?

This very proposition drew some of the 18th century’s highest profile players — including pioneering physicist, mathematician and philosopher Sir Isaac Newton — to invest their money into one of the most insane bubble-and-bust stories you’ve ever heard.

This is a tale of greed, speculation, and financial ruin that makes today’s market swings and scandals seem mere ripples on a pond.

The business of saving national economies


The South Sea Company was founded in 1711 by an Act of Parliament.

In 1713, the company was granted a trading monopoly in the South Seas region. This referred to South America and surrounding waters at that time.

This monopoly was granted as part of the Treaty of Utrecht, which ended the War of the Spanish Succession.

Specifically, Britain had been awarded the right to the Asiento (‘Contract’) by the Spanish Crown, giving them monopoly rights to import African slaves into Spanish-held America.

The British government then granted this right to the South Sea Company.

In exchange for this monopoly, the South Sea Company agreed to buy up £9.5 million (some sources say £11 million) of Britain’s outstanding official debt.

In other words, the business was going to free Britain from debt with the enormous profits of its zero-competition business activities.

This one company, with this enormous competitive advantage (secured by the government), quickly became the hottest investment narrative in Britain.

The company’s stock price ran higher on speculation and misleading claims.

At its peak in 1720, South Sea Company stock had risen by over 800%.


South Sea House, interior

Investors, from the working class to the nobility, rushed to get a piece of the action.

Isaac Newton, pioneering physicist and father of classical mechanics, was among them.

Newton reportedly lost as much as £40 million (adjusted for inflation) in the scheme.

Other luminaries joined Newton as shareholders.

Jonathan Swift (author of Gulliver’s Travels).

King George. Parliament. The Church.

This bubble ran to the very top.

Optimism morphs into delusion

The South Seas Company looked like it couldn’t lose.

The company could make money on trade and interest on the loan it had made to the government (to buy it’s national debt).

Speculation surged.

By summer 1720, the share price was rising fast.

King George I had became governor of the company in 1718, giving it the ultimate seal of approval.

The company launched an aggressive propaganda campaign, promising astronomical returns and framing investment as a patriotic duty.

They offered loans to investors to buy its shares, creating a self-perpetuating cycle of demand and price increases.

As share prices rose, FOMO kicked in, hard.

More people rushed to invest, fearing they’d miss out on easy riches.

Share prices charged from £128 in January 1720 to more than £1,000 by August — an increase of nearly 700% in just seven months.

What goes up…


In September 1720, the bubble burst spectacularly.

Stock prices plummeted from £950 a share in July to £185 by December.

Down 80% in just five months.

The fallout was catastrophic.

Investors were ruined, suicides spiked, and the national economy took a massive hit.

Here’s an account containing the Amount of the Sales of the Real and Personal Estates of the late South Sea Directors:


Back before we had modern portfolio trackers like Navexa

Jonathan Swift, who lost a considerable sum himself, captured the chaos in a satirical ballad:

Thus, the deluded Bankrupt raves;
Puts all upon a desp’rate Bet
Then plunges in the Southern Waves
Dipt over Head and Ears – in Debt.

Aftermath: South Seas Company’s sunken dream

The public outrage was, of course, strong.

Parliament — despite having created, promoted and invested in the whole thing — launched an inquiry.

It uncovered a web of insider trading and bribery that would make even the shadiest of modern-day corporate raiders blush.

Several company directors were punished, including prominent Cabinet members.

The Chancellor of the Exchequer was removed from power and imprisoned in the Tower of London.

It was financial and political carnage on a scale we can’t really imagine, today.


Sir Isaac Newton: Abandoned reason to ride the South Seas wave

Too good to be true, too bad to be false

The South Seas Company saga played out about 300 years ago.

But its lessons still burn bright.

If it sounds too good to be true, it probably is.

Speculation can create a dangerous disconnect between stock prices and underlying value.

Even the smartest people (Isaac Newton — seriously) can get caught up in market mania.

Government involvement doesn’t guarantee safety — it might even amplify risks.

As we navigate today’s markets, from crypto booms and busts to AI stock mania (the jury is still out on this), the South Sea Bubble serves as a stark reminder of the dangers of unchecked speculation.

And a reminder, not only of the importance of due diligence — but of weighing the facts independently of public opinion about those facts.

Quote of the week

I can calculate the motion of heavenly bodies, but not the madness of people.’

— Sir Isaac Newton

That’s it for The Benchmark this week.

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Invest in knowledge,

Thom
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The more crashes, the better…

October 7, 2024


Ignorance as an investment

Dear Reader,

Seth Andrew Klarman is a billionaire. The private investment partnership he founded in 1982 has realized a 20% compounded return for 40 years.

Let that sink in for a moment.

Twenty percent a year. For 40 years.

An annualized return that strong turns $100,000 into $147 million.

Klarman’s Baupost Group hedge fund started with around $270 million in funds under management.

Today, it’s worth around $25 billion.

Since 1982 the stock market has — according to Wikipedia — crashed 10 times.

The 1987 Black Monday crash alone was enough to inflict serious, lasting financial damage to someone close to me.

The rest of their life they lived with the consequences, and regret, of having sold in panic as investors all over the world rushed to get out.

That fear and anxiety investors feel when markets are bad and everybody is racing to the exit, you could characterize as impatience.

And as Warren Buffet says, the stock market is essentially a machine that transfers wealth from the impatient to the patient.

Seth Klarman is one such patient investor. He’s even known as the ‘Oracle of Boston’, placing him alongside Buffet’s ‘Oracle of Omaha’ moniker.


Seth Klarman — one of the world’s most patient investors

Over Klarman’s 40+ years running managing his investment fund, none of the 10 crashes have, in the long term, impeded him from racking up what most of us would agree is a highly impressive return.

According to him:

The daily blips of the market are, in fact, noise — noise that is very difficult for most investors to tune out.’

‘Klar’, by the way, is German for ‘clear’.

Whether or not Klarman’s name had any bearing on the way he views the markets, it’s certainly clear that ignoring the so-called ‘noise’ in favour of a long term strategy has been immensely profitable for him and his investors.

Ignoring noise = essential for long-term returns

When we talk about market noise, we’re talking about a lot of things.

Daily price movements, economic changes that impact the markets, interest rate chatter, and current events are all standard examples.

Here’s a quick example of just how useless most noise is — and why smart investors like Seth Klarman ignore it, preferring instead to focus on their strategy.


The chart shows you the S&P500 index between 2009 and mid 2017. As you can see, annotated along the line is every time the financial media claimed ‘the easy money has been made’.

In other words, nine times they claimed the good times were over for the S&P500…

That things were about to get tough for investors…

That you should perhaps be scared about what was about to happen to the stock market.

And yet, while in the short term the S&P500 did indeed fluctuate — sometimes severely and abruptly — over the seven-and-a-half years this chart shows, it still doubled in value.

We can’t know how many people were scared into selling their stocks each time they read a ‘the easy money…’ headline.

But, you can bet there were quite a few, because for every buyer there must be a seller.

The impatient and the patient.

I know people who won’t even get into the stock market — on account of the fact values can fall — let alone stay in stocks they own through volatile or uncertain times.

Such is their meagre appetite for investment risk — or perhaps their inability to ignore the noise.

(Lots of) time in the market


Amsterdam Stock Exchange, circa 1670

‘Get rich quick’ has become virtually synonymous with ‘scam’. You read those words and you know there has to be a catch.

While it’s true that some investors do bag huge gains from speculative investments like penny stocks, it’s very rare that they’re able to repeat those successes by applying any sort of discipline or formula.

Getting rich quick, you could say, depends on luck.

You have to buy the right investment at precisely the right time and you sell it at the right time. The odds of doing both of these things, consistently, are very low.

Getting rich slowly, on the other hand — building financial freedom and exponential wealth by investing like the Seth Klarmans and Warren Buffets of this world — depends on something else.

It demands investors maintain discipline, patience and a healthy amount of ignorance to allow the daily and weekly ‘noise’ to pass as exactly that — short-term blips on a much longer journey.

CGT options you didn’t know you had?

Tax is a fact of (legal) life.

Capital gains tax on investments, too.

But, you’d be amazed how many investors don’t understand the (very much legal) options available to them in calculating and reporting their capital gains for tax purposes.

Navarre’s latest walks you through the four main CGT strategies in his latest vid.

Click to watch.

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That’s it for The Benchmark this week.

Forward this to someone who’d enjoy it.

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How Bitcoin could break into the S&P 500

September 30, 2024


The Bitcoin bet that left Wall Street in its dust

Dear Reader,

August 11, 2020.

MicroStrategy announces its first Bitcoin purchase.

It would prove to be the first of many. The company now holds more than quarter of a million BTC.

Nobody at the time — save for the company’s then CEO, Michael Saylor — would have predicted the seismic shift it would trigger in the company’s fortunes.

Four years later, let’s see how this particular Bitcoin bet has played out.

David vs. Goliath: MSTR takes on the S&P 500

Since that fateful day in August 2020, MicroStrategy (MSTR) has embarked on a journey that would make even the most bullish tech investors blush.

While the S&P 500 has delivered a respectable 70% return over this period, MSTR has gained 1,071%.

Check it out:


Let that sink in for a moment.

While the broader market was busy navigating pandemic recovery, inflation fears, and geopolitical tensions, MicroStrategy was quietly (or not so quietly) outperforming nearly every other stock in the index.

The numbers don’t lie

At the time of writing, MSTR is trading at $165.98, up 9.24% in a single day.

Compare this to the S&P 500’s current level of 5,648.40, which represents a 25.31% increase over the past year.


MSTR performance over the past five years

MicroStrategy’s market cap is $30.37 billion.

The company’s 50-day moving average price is $142.38, while its 200-day moving average is $120.86.

MSTR’s trading volume has exploded, with 16,889,560 shares changing hands compared to an average volume of 11,784,407.

These figures paint a picture of a stock that’s not just growing but accelerating.

Driving this acceleration, of course, is the company’s massive Bitcoin holdings.

As of the latest reports, the company holds 252,220 BTC, purchased at an average price of $39,456.

This translates to an unrealized gain of 61.92%, or $6.1 billion.

It’s worth noting that while MSTR has outperformed Bitcoin itself (which is up 425% since 2020), it’s the company’s leveraged position that has amplified these gains for shareholders.

It’s also worth noting that Saylor regards the basic strategy as something anyone can replicate:


MicroStrategy’s performance becomes even more impressive when we stack it up against the tech giants that typically dominate market discussions.

Since August 2020, MSTR has outperformed the ‘Magnificent 7’ — Apple, Microsoft, Alphabet, Amazon, Nvidia, Meta, and Tesla.

MicroStrategy currently ranks 306th in terms of market capitalization among publicly traded U.S. companies.

This puts it squarely in the middle of the S&P 500 pack, despite its outsized returns.

Entering the S&P on the back of buying BTC?


S&P 500 heatmap

With such stellar performance, why isn’t MicroStrategy already part of the S&P 500? The answer lies in the index’s stringent inclusion criteria.

To be considered, a company needs:

  • A market cap of at least $11.2 billion — check.
  • 50% of stocks in free circulation — check.
  • A ratio of annual turnover to market cap of at least 0.3.
  • Monthly traded value higher than 250,000 shares for six consecutive months.

MicroStrategy’s focus on Bitcoin and its issuance of convertible bonds have been hurdles. However, come January 1, 2025, new FASB rules on digital asset holdings could change the game.

If MSTR reports positive earnings on October 29, 2024, it could be a strong contender for S&P 500 inclusion, potentially adding $3 billion to its undistributed profits.

Flash in the pan, or new paradigm?

The company’s strategy is high-risk, high-reward, tying its fortunes closely to the volatile cryptocurrency market.

But, MicroStrategy’s journey since August 2020 has been extraordinary. Its 1,071% return has left the S&P 500’s 70% gain in the dust, challenging conventional wisdom about corporate treasury management and investment strategies.

The question now: Is MicroStrategy a outlier, or a harbinger of a new era in corporate finance? Time will tell, and Wall Street will be watching closely.

Just this month, Saylor announces MicroStrategy had scooped up another batch of BTC:

twitter profile avatar
Michael Saylor⚡️Twitter Logo
@saylor
MicroStrategy has acquired 18,300 BTC for ~$1.11 billion at ~$60,408 per #bitcoin and has achieved BTC Yield of 4.4% QTD and 17.0% YTD. As of 9/12/2024, we hodl 244,800 $BTC acquired for ~$9.45 billion at ~$38,585 per bitcoin. $MSTR https://www.microstrategy.com/press/microstrategy-acquires-18300-btc-achieves-btc-yield-of-4-qtd-17-ytd-now-holds-244800-btc

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MicroStrategy Acquires 18,300 BTC and achieve…
MicroStrategy Acquires 18,300 BTC and achieves BTC Yield of 4.4% QTD and 17.0% Y…
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Run an SMSF? New video for you:

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That’s it for The Benchmark this week.

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The Benchmark

Rate cut rally & weird election year market facts

September 23, 2024


Three trends, one quarter

Dear Reader,

Three financial phenomena are colliding.

In the final quarter of 2024, we’ll find out who’s going to run the United States government for the next four years.

We’ll learn the impact of central bankers jacking up interest rates for the first time since 2020.

And, we’ll enter a period in which stocks historically perform well.

So, what can we expect to happen from here?

The fourth quarter trend

About three quarters of the time since 1945, the S&P 500 has risen in the fourth quarter of any given year.

In 77% of the past 79 years, to be exact.

Meaning the odds are decent that stocks pop between now and year’s end.

The market gained 26.29% total return in 2023, having been down18.11% in 2022.

At the time of writing, the S&P 500 is up 20% year-to-date, having just made new highs.

This historically robust quarter for stocks delivers, on average, a 3.8% gain.

These three strong months tend to follow the toughest month of the year:

But, of course, this is market performance in isolation.

And the market, as we know, is a measure for many things — not just what people are prepared to buy and sell stocks for.

Mark Hackett, chief of investment research for Nationwide Mutual Insurance, explains the factors feeding into this particular fourth quarter:

We anticipate continued volatility through November as investors await greater clarity on Fed policy, macroeconomic trends, and, of course, the upcoming election. However, our outlook for the end of the year remains positive. We expect a strong fourth quarter, driven by seasonal tailwinds, diminished election uncertainty, and Fed [rate cuts].’

The ‘seasonal tailwind’ he’s talking about is the market’s historical tendency to rise in Q4, most of the time.

Just to be clear, most of the time does not mean all of the time.

A 77% chance stocks go up is just another way to say a 23% chance they go down.

The past gives us perspective, but it doesn’t predict the future.

As for the election and the Fed, well, let’s take a look.

The election year trend

On November 5, the world will know who’s going to be running the United States for the next four years.

Who wins the election will, no doubt, have an impact on the stock market.

But exactly what impact?

Take a look at the chart below.

It’s the S&P 500 up until a couple of months ago, compared to the average of every election year performance from 1949 to 2023.


The market is already trading way higher than your average election year.

Maybe the Q4 trend and the Fed’s anticipated rate cut is going to drive those lines apart even more.

But back to who runs the most important economy on the planet.

If I asked you which candidate was going to be better for the financial markets, you might say Trump.

I would have, until I found this from the WSJ:

The Dow Jones Industrial Average has risen at an annualized rate of 8.2% under Democratic presidents.

For Republican presidents? Just 3.2%.

Adjust for inflation, and those numbers come to 3.7% and 1.4%, respectively.


Source

Democrat presidents, on average, are more than twice as good for stocks than Republicans.

Of course, correlation does not imply causation.

But with the Democratic candidate polling higher, at the time of writing, than the Republican, could that imply another tailwind for stocks going into Q4?

Fed makes hotly-anticipated interest rate cut

Last week, the Federal Reserve cut interest rates by half a percentage point.

It’s now 4.875%. The Fed states they want to get that down to about 2.9%.

While it’s not a simple case of inverse correlation, we can say that, generally speaking, stocks go up when interest rates go down.

There are exceptions, of course, but generally this is the case.

The initial reaction was no exception.


Source

Source

The real question, beyond the initial market reaction, is how the expected trend of continued rate cuts will impact the stock market and economy.

(The economy, historically, takes longer to respond to interest rates than the markets, which can price in sentiment about the future pretty much instantly.)

Some expect the market to soar from here.


Source

Only time will tell if this rate cut marks the resuming of what some believe is a secular bull market, or will merely apply a weak handbrake to what others believe is an inevitable recession.

But for the quarter ahead, the stage would appear set for a historically strong final three months of the year.

How to check an investment strategy is working

Navarre’s latest video walks you through how to make sure your investment strategy is working using the Navexa Portfolio Tracker.

Check it out now:

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That’s it for The Benchmark this week.

Forward this to someone who’d enjoy it.

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Thom
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The Benchmark

The other Great Depression

September 16, 2024


The new railroad across America the world

Dear Reader,

Most people think the Great Depression started with Wall Street’s notorious 1929 crash.

This is because most people have short memories. Few bother digging into history very far.

As a Benchmark reader, you are clearly not one of these people.

Sometimes, we can learn more about the present and near-term future by paying attention to things that happened a long time ago.

Especially when those things perhaps seemed implausible in their time.

Today, I want to take you on a ride to the 19th Century.

More specifically, a ride that starts with great promise and winds up running off the rails into chaos and ruin.


AI train wreck

The promise & peril of new tech

The United States of America would not be what it is today had the railroad industry not taken off there in the 1800s.

The railroad allowed the industrial revolution early in the century to explode out of the northeast of the country and propel settlement and developments in the west.

Journeys that previously took months now took only days; the frontier was wide open.

The first passenger and freight line opened in 1827 and gave rise to nearly 50 years of continuous building.

Until, that is, the Great Depression few today remember. More on that in a second.


The first transcontinental railroad

It didn’t take long for speculation and regulation to poison the pure promise of the railway revolution.

Building railways cost lots of money. This meant borrowing, over-leveraging and rampant speculation.

This speculation began to influence the industry itself: While there were plenty of short railways initially, most of these were folded into trunk lines due to a fast-developing financial system based on Wall Street’s appetite for railway bonds.

(Credit to Thomas Pueyo at Uncharted Territories for the summary.)

As so often happens when speculation runs wild — especially concerning a novel and significant technological development — consequences quickly followed.

The other Great Depression

After the American Civil War, the railroad boom went to another level — companies laid 33,000 miles, or 53,000km, of track in just five years.

Grants, subsidies and speculation fuelled the boom.

The railroad industry become one of the largest employers in the country.

Over-expansion hit hard. Mountains of money became tied up in projects that offered no immediate return.

The market for railway bonds collapsed. The companies that had borrowed all the money couldn’t repay it when the banks came calling.

In 1873, 55 railroad companies failed. Another 60 collapsed inside 12 months. Development and growth fell off a cliff.

This triggered a chain of bank failures and closed the NYSE.

Strikes, riots and protests broke out.

The contagion spread to Europe and marked the beginning of two decades of economic pain for Britain that became known as the Long Depression.


Schwarzer Freitag (Black Friday) on the Vienna Stock Exchange as the railroad crash hit Europe

Until 1929, the US knew this crash as the Great Depression, when the subsequent crisis stole the moniker by setting a new standard for financial crisis and economic strife.

So, Reader, 150 years on, what can we do but observe the parallels?

AI = 21st Century railroad?

We’re living in the AI boom times.

The market is projected to more than double in the next few years.

NVIDIA — current king of the AI jungle — recently became worth more than most nations’ GDP.

Here’s some parallels between the AI and railway booms.

Rapid growth and expansion: The AI industry is currently going through explosive growth, with an expected annual growth rate of 37.3% from 2023 to 2030.

Rampant speculation: The AI market is already commanding substantial investment, with the market size expected to grow from $454.12 billion in 2022 to around $2,575.16 billion in the near future. Analysts are currently mid-freakout regarding how far NVIDIA and the other big tech companies can go riding the AI wave.

Transformative impact: Railroads revolutionized transportation and commerce in the 19th century, becoming the largest employer outside of agriculture. Similarly, AI is poised to transform pretty much every aspect of life and business.

Overexpansion concerns: The railroad boom led to economic overexpansion, with most capital invested in projects offering no immediate returns. While the AI industry hasn’t faced a similar crisis, there are concerns about the rapid proliferation of AI technologies and their potential economic impacts.

Competition and market saturation: Many railroads overbuilt, leading to ruinous competition for freight traffic. In the AI industry, we’re seeing a proliferation of AI models and applications, which could potentially lead to market saturation and intense competition.

But that’s not all.


Watercolour Van Gogh by AI

Perhaps most alarming of the parallels is the cost to build AI products.

According to Thomas Pueyo:

‘ Foundation models are the software that power OpenAI’s ChatGPT, Anthropic’s Claude, Meta’s Llama, Google’s Gemini, and the like. It’s very expensive to make them. Today, it’s in the order of hundreds of millions of dollars. In the not-too-distant future, it will likely reach billions, and within a decade, it might reach a trillion.’

What that means, is despite AI’s seemingly limitless promise and potential, it actually costs loads to produce.

And that cost is only going higher.

Take a look:


This has a lot to do with the bullishness around NVIDIA — they produce most of the chips that make is possible to build AI.

Will AI send the market off the rails?

History doesn’t repeat itself, but it does rhyme‘, as Mark Twain famously said.

He also said ‘denial ain’t just a river in Egypt‘.

Well, this being one of the more dense and expansive Benchmark emails I’ve written to you, I think it’s only appropriate I defer to a higher intelligence to try to give you a takeaway insight.

At least, that’s what I tried to do.

I asked my current AI tool of choice, Perplexity, this question:

What’s the likelihood that the AI boom crashes the economy in the next five years?

This is what I got back:


Let’s hope this crash doesn’t spiral into a stock market and economy-wide contagion that dwarfs our current definition of Great Depression and consigns 1929 to lesser-known history.

Quote of the week

In the 1848 gold rush to California, most gold diggers didn’t make much money, but the shovelmakers made a fortune. NVIDIA is today’s shovelmaker.’

— Thomas Pueyo

Earn dividends? You should see this…

Navarre’s latest video covers a massively misunderstood aspect of investing.

This common mistake once nearly led him to sell a stock he’d made a great return on, thinking it had lost him money.

How does that happen, and how do you avoid such mistakes?

It’s actually very simple. Check out the video here:

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That’s it for The Benchmark this week.

Forward this to to share the insight with someone who’d enjoy it.

If one of our dear readers forwarded this to you, welcome.

Until next week!

Invest in knowledge,

Thom
Editor, The Benchmark

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All information contained in The Benchmark and on navexa.io is for education and informational purposes only. It is not intended as a substitute for professional financial or tax advice. The Benchmark and any contributors to The Benchmark are not financial professionals, and are not aware of your personal financial circumstances.