The Big Picture

Your Brain In Numbers
10 Wednesday PM Reads
Asset Classes: Real 10-Year Expected Return
You Are Worrying About the Wrong Things
10 Wednesday AM Reads
Best-performing Unconventional Alternative Investment Ranking

Posted: 22 Oct 2014 05:30 PM PDT

What gives you headaches? Is your brain shrinking? Find out the answers and much more, right here!

Posted: 22 Oct 2014 02:30 PM PDT

My afternoon train reads:

• The world's best market timers: the Federal Reserve (Marketwatch)
• Hedge Funds Take Another Hit as Spinoff Stocks Fizzle (WSJ) see also Misery Widespread at Hedge Funds (WSJ)
• Swedroe: Valuations And Asset Allocation (ETF.com)
• Yes, Market Volatility Is a Job-Killer (Real Time Economics)
• New York Fed Caught Sight of London Whale and Let Him Go (Bloomberg View) see also New York Fed Faulted in 'London Whale' Case (WSJ)
• Bloomberg Drops Huge Cash, Poaches Business Insider’s Joe Weisenthal To Host New TV Show (Business Insider)
• Walmart Is Killing the Rest of Corporate America in Solar Power Adoption (Slate)
• The Disruption Myth: The idea that businesses are more vulnerable to upstarts than ever is out-of-date—and that's a big problem. (The Atlantic)
• Rush Limbaugh is America's least-trusted news source (WonkBlog)
• The complete guide to Apple Pay (Quartz)

What are you reading?

US Regulators Agree to Go Easier on Mortgage Lending Rules

Source: WSJ

Asset Classes: Real 10-Year Expected Return

Posted: 22 Oct 2014 01:00 PM PDT

Source: Research Affiliates

Rob Arnott of Research Affiliates writes:

In a world of low bond yields and slow economic growth, historically realized 5-6% real (7-8% nominal) asset class returns may be unrealistic expectations for the future.

In other words, assets with above-average valuations may not deliver the sort of returns people came to expect before the credit crisis.

What’s an investor to do?

Thankfully, we have a chart.

Continues here

You Are Worrying About the Wrong Things

Posted: 22 Oct 2014 07:30 AM PDT

No, you are not going to die from Ebola.

To quote a wag on Twitter, "More Americans have been married to Kim Kardashian than have died from Ebola."

But the latest scare does have a small positive: It provides me with yet another opportunity to lecture you about how incredibly dumb your lizard brain is. (It’s also an opportunity to castigate the media for turning a minuscule threat into a full-blown conflagration, but that's shooting fish in a barrel).

How serious is the danger of Ebola infection?

Despite the nonstop media coverage, it’s important to note that this doesn’t matter to 99.999 percent of Americans. Back in May, we noted the things that are most likely to kill you — or your investments — are not the things most of us typically obsess about.

We fear the awesome predatory perfection of the great white shark, and have made the Discovery Channel's “Shark Week,” “the longest-running cable television programming event in history." This seems somewhat disproportionate, given that 10 people a year die from shark attacks — out of more than 7 billion people. If you want to fear a living creature, than logic suggests it's the mosquito — they kill more human beings than any other animal on the planet. Man, be it through wars or murder or wanton disregard or simple benign neglect, comes in a distant second.

According to the Centers for Disease Control and Prevention, the 10 leading causes of death in the U.S. are heart disease, cancer, chronic lower respiratory diseases, stroke, unintentional injuries, Alzheimer’s disease, diabetes, influenza and pneumonia, kidney disease, and suicide. (That was for 2012, the most recent year we have complete data for.)

We seem to be much more concerned about things like terrorism than we are mundane things like heart disease, cancer or car accidents. Yet those three were in the top 10, while more Americans were killed by toddlers than by terrorists.

Continues here

10 Wednesday AM Reads

Posted: 22 Oct 2014 05:30 AM PDT

My morning train reads:

• U.S. Stocks Surge; Nasdaq Up 2.4% (WSJ) but see Hong Kong Stocks Defy Protests to Post World's Best Gain (Bloomberg)
• Investors Hiring: Mathematicians and Artists Need Apply (Institutional Investor)
• Cassidy: Is the Chinese Economy About to Fall Off a Cliff? (New Yorker) see also The Top 10 U.S. States Where Chinese Are Investing in Real Estate (Real Time Economics)
• A Skeptic's View of Today's Investing Religions (AI-CIO)
• 74 Quotes From The Intelligent Investor, Revised Edition (Arbor Investment Planner)