Author: Smead Capital Management

John Maynard Keynes introduced the concept of “animal spirits” as it relates to economic activity in his 1936 book The General Theory of Employment, Interest and Money. The term “animal spirits” is a way to describe what drives human behavior to consume, take risk and engage the instinctual proclivities that are natural to economic living. This important piece of Keynes’s work came seven years after the Great Depression and we think the concept is critical to understanding the economy and markets of today, eight years after the biggest recession since the period he was addressing.

As a young stockbroker in the 1980’s, I was hungry for disciplines which could help me make money for clients. One of the most sensible things I came across was a theory by an investor that we refer to as the 70-20-10 rule.  Human nature dictates an urge to make money in stocks quickly and for me that was proving to be difficult and problematic. Hence, the hunger to learn from theories like this rule.

Any avid climber must be deeply anxious while watching the movie, Everest, a true story based on a 1996 expedition to the summit of Mount Everest. This gripping story, from a memoir called Left for Dead: My Journey Home from Everest, follows a climbing team whose journey turned disastrous from dealing with the naturally volatile conditions on Mount Everest.