Archive for October, 2016

Throat clearing

Tuesday, October 18th, 2016

My written voice is a separate part of my consciousness. It slumbers for months at a stretch, roused by emotional outbursts every few months. Others are driven to drink, I am driven to write.

I have the impulse to write about the follies of others, how clear things are to me and how hopelessly muddled it is to them. It isn’t a pretty impulse, and writing was easier when I was younger and less concerned with appearances. That voice IS genuine – underneath I am every bit as arrogant and unmeasured as what I sound like when I speak with my loudest voice.

With age, I have lost space. The known world shrank and shrank as the unknown beyond proved its limitless depths again and again. I know so little, so little is certain. The simple logic games and puzzles still delight me, but appear to me as nostalgic toys and not the bludgeoning weapons I once thought they were. Words matter only if people care. Words persist only if they are supported by clarity of thought. Without the company of minds for which clarity is a virtue, these two goals tug in different directions.

The resulting strain makes for much confusion. I am no sophist, I will not corrupt my logic just so you will listen. I am no hermit, I have not the independence of mind to hide away for decades nursing a novel proof. Such is my human condition.

Low-cost passive ETFs and magical thinking

Thursday, October 13th, 2016

Reduced activity, low fees and tax efficiency are reasons given for why passive investing is low-cost for the investor. This logic is wrong. Those are reasons why passive investing is low-cost for the fund management company. The reason those cost-savings get passed to the investor is because the product is standardised by virtue of tracking a standard, named index like the S&P 500, and multiple companies compete to provide the same product.

Without competition, there’s no reason for an ETF to be low-cost. Companies offering unique ETFs have no directly, easily comparable competition, and you should not expect them to be as efficient as SPY, IVV and VOO are.