yield on tens, which were a — equity market gains were up 44. so what was in the jobs act? you didn’t mention it in your book because the job act was already done. we’re talking about what is called crowd funding specific that one of the things that the far left really disliked about that bill i? saw this was going to usher in a thousand new madoffs, this jobs act. that’s the worry. but i think it’s the same worry as when they launched wikipedia. you would think a freeline, a wiki, would generate thousands phony articles but it hasn’t happened on wikipedia. i’m going to take the other side of it. we have jim chanos here. i could argue this crowd funding is going to ultimately lead to the recreation of the boiler rooms, and find lot of experiences that are ultimately — if your income sund 100,000, you’re not allowed to put more than 5% or $2,000 in. okay. you might lose 5% of your income. i think that is not devastating. the real problem with the boiler rooms back in the 1920s is they wiped people out. but this is ultimately, by the way, blt retail investors. it’s not about the institutional investors. it is about taking mom and pop’s money and putting it to work. i can see why that could be a good things in terms of being able to access capital but i can also see the other side it have. i think this is a cultural chang. this is one step. america as prided itself as the most entrepreneurial company. but it’s a mine or the who invest actively. it will empower ut. it won’t be leaving it all to the government or to big organizations. and it’s really important that we democratize wall street. this is what we should be doing. chanos is shaking his head here. but professor, is it wise to do it on the back of less disclosure? and that’s really i think one of the arguments that concerns me is that a lot of these companies will be coming forward. i’m all for letting companies raise money in the markets and read the prospectus and paid your money and take your chances but if we don’t have good disclosure, which is one of the good things that came out of cracking down on the boiler rooms of the 20s, are we taking a step backwards? we already have a problem with retail participation in the equity markets because people think the game is rigged. i think this jobs act is an experiment. like anything else, it depends on a social reaction and how people learn from each other, how the internet develops, how information starts to develop. it could be that it works out badly, but the other side of this is if we require extensive disclosure, that’s going to kill small business startups because they can’t afford that. so there’s a difficult trade-off and we’re experimenting with it. i’m optimistic that we’ll learn something positive that will allow for more small businesses. but there are worries. we’ve talked so many times about animal spirits and you haven’t updated us on — where are we in — let’s just talk in terms of animal spirits. is it good? the market’s up. is the market up because we feel better and the animal spirits are beingp or is it up because we have all this extraordinary fed action that we’ve seen? well, the stock market is up since 2009 because of an extraordinary growth of earnings. the question to me is whether that’s sustainable. some part of tha cost cutting. and there are still risks in the future that some are still weighing, like the further decline of house prices. there’s likely to be millions of more families evicted from their homes because of nonpayment on their mortgages. there’s things on the horizon that — so the animal spirits are not back to 2005 levels. was that too much? did we overshoot then? we way overshot. is it too hot, too cold or just right right now? i’d say it’s too cold. our sweat’ palms is the symptom we have right now and it’s not encouraging. the employment population ratio is kind of stuck at a bottom at 58.5%. that’s a sign the unemployment rate is down, jobs aren’t there. that is a chronic, smoldering problem that is weighing on people’s psyches. and you’re not convinced that we’re not done with housing yet? we still got work to do there, too? well, our s&p case shows an interruption after the first time home buyers tax credit but they’re still going down. they may turn up. i don’t know. it’s not obvious they’re not going down at a rapid clip. but if they go down much more at all, we’re going to have a worse problem and it going to hurt the banks and mortgage lenders. professor thanks. we’ll see you.
Michael Mauboussin Tips From Great Investors [Pt.2]
This is the second part of a short series on Michael J. Mauboussin's research document reflecting on 30 years of Wall Street analysis published in 2016. Q3 2020 hedge fund letters, conferences and more The document outlined Mauboussin's observations of successful investors throughout his three decades on the Street. This article starts at point six. Read More