Weekend Reading

21 October 2016 | by Paul Perrino, CFA®

A summary of this week’s best articles. Follow us on Twitter (@INTRINSICINV) for similar ongoing posts and shares.

Some Big U.S. Cities See Apartment Rents Fall for First Time in Years (Laura Kusisto, @LauraKusisto, WSJ)

Increasing rents have been a hot topic in many major cities over the past few years, but it looks like that’s starting to reverse. San Francisco, which has seen some of the fastest rent increases was down 3% over last quarter. As rents in these popular areas are declining, they’re starting to increase in more affordable cities, like Sacramento, which saw a 12% increase in rents in the last quarter.

Cheap Luxury Goods in the U.K. Lure Shoppers (Saabira Chaudhuri and Simon Zekaria, @SaabiraC and @SimonZekaria, WSJ)

Since the passing of Brexit in the UK, the pound has gotten cheaper compared to other major global currencies. This has benefited tourists shopping in the UK. A Louis Vuitton Speedly 30 bag, which costs $1,115 in the US only costs $802 in the UK. “…these tourists are buying an average of 10 items, or double the count from last year.”

The Difference Between Rationality and Intelligence (David Hambrick and Alexander Burgoyne, NYT)

The rational investor is a common character in academic finance. However, there usually isn’t much analysis on how to identify or how to become that mythical person. “…Professor Stanovich and colleagues have introduced the concept of the rationality quotient, or R.Q. If an I.Q. test measures something like raw intellectual horsepower (abstract reasoning and verbal ability), a test of R.Q. would measure the propensity for reflective thought — stepping back from your own thinking and correcting its faulty tendencies.” Through their tests and training, they’ve found that R.Q can be developed.

While we do not accept public comments on this blog for compliance reasons, we encourage readers to contact us with their thoughts.

The information contained in this post represents Ensemble Capital Management’s general opinions and should not be construed as personalized or individualized investment, financial, tax, legal, or other advice. No advisor/client relationship is created by your access of this site. Past performance is no guarantee of future results. All investments in securities carry risks, including the risk of losing one’s entire investment. If a security discussed in this blog entry is owned by an employee, principal and/or client of Ensemble Capital you will find a disclosure regarding the security held above. Should an employee, principal and/or client of Ensemble Capital subsequently purchase or sell any position in a security discussed in this blog entry, we will not update the above disclosure nor revise any archived blog entry after the date it is originally posted. If reviewing this blog entry after its original post date, please refer to our current 13F filing or contact us for a current or past copy of such filing. Each quarter we file a 13F report of holdings, which discloses all of our reportable client holdings. Ensemble Capital is a discretionary investment manager and does not make “recommendations” of securities. Nothing contained within this post (including any content we link to or other 3rd party content) constitutes a solicitation, recommendation, endorsement, or offer to buy or sell any securities or other financial instrument.