JANUARY 2026
IN THIS ISSUE
Amateur hour, without the amateur
UPDATE: Go to cash for 7 years
Every January, I revisit a “bold contrarian call” made by KCI Research on January 20, 2021 that “It's Time To Go To Cash For The Next 7 Years”. The author wrote confidently that “Most Investors Would Be Better Off Taking A Seven-Year Vacation” from the stock market.
As we are now five years into this seven-year window, let’s check in on the call.
To restate the parameters, in January 2021 the coupon rate for a 7 year T-Note was 0.395% semi-annually (0.79% annually).
(T-Notes pay a fixed interest rate every 6 months, is exempt from state and local taxation, but is subject to federal taxation. The calculations herein are simplified projections that do not perfectly reflect the outcome of an actual investment in T-Notes and excludes consideration of their tax-advantaged benefits. The information herein is not personalized investment advice nor an investment recommendation from Likely Capital Management, LLC. Past performance is not indicative of future results.)
On the other side we assumed buying VOO, Vanguard’s low cost S&P 500 Index Fund, and letting it run for 7 years.
As of January 20, 2026:
The T-Note position would have appreciated to $1,039.50, reflecting its fixed annual coupon rate of 0.79%.
The VOO position would have appreciated to $1,802.15, for a Compound Annual Growth Rate of 12.501%.
Here’s the chart:
Source: Likely Capital Management
Look, there are obvious financial consequences to making “bold call” bets like this. But the point is not to pile on folks when they turn out to be wrong. Every investor makes bad bets, including me; such is the nature of our uncertainty-driven business. Instead, my purpose is to help readers be skeptical of attention-grabbing headlines and develop a process for learning from them.
In a 24-hour news cycle that produces hyper-short-lived content, it is all-too-easy to forget wrong calls from the past and continue falling for them in the future. As Ken Fisher’s book notes, Markets Never Forget (But People Do).
A reliable investment process requires being wary of the incentives behind these prognostications. Mundane forecasts do not drive clicks or newsletter subscriptions. Thought Leaders (in the very broadest sense of the term) are incentivized to make contrarian sky-is-falling calls - like Jack Dorsey’s “hyperinflation” call and Robert Kiyosaki’s perpetual crash predictions - to establish their leading insightfulness before anyone else.
It remains possible that this 2021 call could turn out to be correct by January 2028. But Thinking in Likelyhoods… trying to buck enduring statistical principles, trying to outwit the Law of Large Numbers not just with one call but systematically over many calls over large time horizons, is virtually certain to underperform.
So as year seven approaches, we can continue becoming mathematically more confident in the outcome with each passing year. Because while contrarianism gets the clicks, prudence gets the performance.
ONE MORE THING…
Amateur hour, without the amateur. A reminder for Warren Buffett’s “no called strikes” metaphor, for only making bets when one has a sufficiently strong basis for doing so. Thousands of Amateur Gamblers Are Beating Wall Street Ph.D.s
The information and opinions contained in this newsletter are for background and informational/educational purposes only. The information herein is not personalized investment advice nor an investment recommendation on the part of Likely Capital Management, LLC (“Likely Capital”). No portion of the commentary included herein is to be construed as an offer or a solicitation to effect any transaction in securities. No representation, warranty, or undertaking, express or implied, is given as to the accuracy or completeness of the information or opinions contained herein, and no liability is accepted as to the accuracy or completeness of any such information or opinions.
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