Register For Our Mailing List

Register to receive our free weekly newsletter including editorials.

Home / 59

Weekly newsletter to subscribers features important investment insights

Extract from Cuffelinks Newsletter Edition 59

Many of our readers and writers are away at the moment, and Cuffelinks will not be publishing its usual original content this week. However, a couple of articles have come across our desk that deliver insightful Anzac Day reading between two-up throws.

The first is from Howard Marks of Oaktree Capital. He has been writing memos to his clients for 25 years, and the latest asks useful questions for all investors. What do you believe in? What principles lie behind your decisions? Investors should consider:

  • Do efficient markets exist? Is it possible to 'beat the market'?
  • Will you emphasise risk control or return maximisation as the primary route to success?
  • Will you put your faith in macro forecasts and adjust your portfolio accordingly?
  • How do you think about risk? Is it volatility or the probability of permanent loss?
  • How do you view the question of determinism versus randomness or luck?
  • Most importantly, how will you define success, and what risks will you take to achieve it? In trying to be right, are you willing to bear the inescapable risk of being wrong?

That’s a worthwhile list of questions. If we’re going to dare to be great, Marks asserts, we have to dare to be different. And wrong. The April 2014 memo, 'Dare to Be Great II' is linked here.

The second study is the 20th annual Quantitative Analysis of Investor Behavior (QAIB) from Boston-based DALBAR Inc. It claims that while the S&P500 index has risen 9.22% pa over the last 20 years, the average investor has earned only 5.02% pa. DALBAR argues investors are irrational and buy high when markets are strong, and then panic and sell low when markets weaken. Investment returns depend more on investor behaviour than fund performance. They say investor education is failing, because the best advice is to invest more money, hold on to the investments and manage them safely rather than trying to time the market. Focus more on achieving personal financial goals than performance.

While the study has its criticis, it also has valuable lessons, and DALBAR offers a free look at the full report here.

 

RELATED ARTICLES

Ben Graham’s three most enduring principles

The ASX's 16-year drought: a rebuttal

Even Warren Buffett lost his edge 20 years ago

banner

Most viewed in recent weeks

Raising the GST to 15%

Treasurer Jim Chalmers aims to tackle tax reform but faces challenges. Previous reviews struggled due to political sensitivities, highlighting the need for comprehensive and politically feasible change.

7 examples of how the new super tax will be calculated

You've no doubt heard about Division 296. These case studies show what people at various levels above the $3 million threshold might need to pay the ATO, with examples ranging from under $500 to more than $35,000.

The revolt against Baby Boomer wealth

The $3m super tax could be put down to the Government needing money and the wealthy being easy targets. It’s deeper than that though and this looks at the factors behind the policy and why more taxes on the wealthy are coming.

Are franking credits hurting Australia’s economy?

Business investment and per capita GDP have languished over the past decade and the Labor Government is conducting inquiries to find out why. Franking credits should be part of the debate about our stalling economy.

Here's what should replace the $3 million super tax

With Div. 296 looming, is there a smarter way to tax superannuation? This proposes a fairer, income-linked alternative that respects compounding, ensures predictability, and avoids taxing unrealised capital gains. 

The rubbery numbers behind super tax concessions

In selling the super tax, Labor has repeated Treasury claims of there being $50 billion in super tax concessions annually, mostly flowing to high-income earners. This figure is vastly overstated.

Latest Updates

Investment strategies

Trump's US dollar assault is fuelling CBA's rise

Australian-based investors have been perplexed by the steep rise in CBA's share price But it's becoming clear that US funds are buying into our largest bank as a hedge against potential QE and further falls in the US dollar.

Investment strategies

With markets near record highs, here's what you should do with your portfolio

Markets have weathered geopolitical turmoil, hitting near record highs. Investors face tough decisions on valuations, asset concentration, and strategic portfolio rebalancing for risk control and future returns.

Property

Soaring house prices may be locking people into marriages

Soaring house prices are deepening Australia's cost of living crisis - and possibly distorting marriage decisions. New research links unexpected price changes to whether couples separate or silently struggle together.

Investment strategies

Google is facing 'the innovator's dilemma'

Artificial intelligence is forcing Google to rethink search - and its future. As usage shifts and rivals close in, will it adapt in time, or become a cautionary tale of disrupted disruptors?

Investment strategies

Study supports what many suspected about passive investing

The surge in passive investing doesn’t just mirror the market—it shapes it, often amplifying the rise of the largest firms and creating new risks and opportunities. For investors, understanding these effects is essential.

Property

Should we dump stamp duties for land taxes?

Economists have long flagged the idea of swapping property taxes for land taxes for fairness and equity reasons. This looks at why what seems fairer may not deliver the outcomes that we expect.

Investing

Being human means being a bad investor

Many of the behaviours that have made humans such a successful species also make it difficult for us to be good, long-term investors. The key to better decision making is to understand what makes us human and adapt.

Sponsors

Alliances

© 2025 Morningstar, Inc. All rights reserved.

Disclaimer
The data, research and opinions provided here are for information purposes; are not an offer to buy or sell a security; and are not warranted to be correct, complete or accurate. Morningstar, its affiliates, and third-party content providers are not responsible for any investment decisions, damages or losses resulting from, or related to, the data and analyses or their use. To the extent any content is general advice, it has been prepared for clients of Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892), without reference to your financial objectives, situation or needs. For more information refer to our Financial Services Guide. You should consider the advice in light of these matters and if applicable, the relevant Product Disclosure Statement before making any decision to invest. Past performance does not necessarily indicate a financial product’s future performance. To obtain advice tailored to your situation, contact a professional financial adviser. Articles are current as at date of publication.
This website contains information and opinions provided by third parties. Inclusion of this information does not necessarily represent Morningstar’s positions, strategies or opinions and should not be considered an endorsement by Morningstar.