Fact: We consciously or subconsciously prefer complexity to simplicity in spite of what we might think. Complexity helps us to “make sense” of the world and situations around us, which satisfieS our innate need to have a “rational” explanation for everything. Shane over at Farnam Street did a great write-up on complexity bias earlier this …
Month: January 2018
Inflating Attention
There sure is a lot of talk about inflation these days. Bonds have been reacting to the news. Commodities have been reacting to the news. Stocks not so much as a little inflation usually isn’t a big deal for them. While inflation has been dormant for much of the past 10 years, we are starting …
The US vs. the Rest of the World
There has been much clamoring and consternation about stock market valuations for years now. We have commented on this extensively here and here. While stock market valuations can provide you with a sense of future returns, they aren’t very useful in identifying inflection points. For the record, we are seeing quite a few late cycles …
REIT Margins vs. Multiples
Margins and multiples for a given sector tend to be quite cyclical. It’s no different for REITs. While margins may permanently expand as a portfolio gains scale, it will still be subject to the cyclical fluctuations in revenues and operating expenses. We compared EBITDA margins to EV/EBITDA multiples[1] from last cycle’s peak to current levels …