[Week 23 of 2026] Trophies, Taxes, and Treasuries

Welcome back to Price and Prejudice with a few musings from Week 23 of 2026.

Acres and Arsenal

After 22 years, Arsenal are champions of England again. I've spent most of my adult life quietly suffering this club, and somewhere along the way I conscripted my parents and my wife into suffering it too. But finally, we are the champions, and part of it is thanks to its owner, profiled in this WSJ article. Stan Kroenke owns the Rams, the Nuggets, the Avalanche, and Arsenal, and over five years every one of them has won a title. He is also, almost as an aside, the largest private landowner in the United States, sitting on roughly 2.7 million acres.

The article hints at the possibility that being a successful real estate investor also helps being a long-term sports team owner. The first obvious connection is that real estate trains you to underwrite duration: you buy an illiquid asset you can't mark to market every night and you have to sit through years of negative cash flow while a project gets built out. Kroenke stuck with a general manager through lean years before hiring the youngest head coach in modern NFL history. And at Arsenal he kept Arteta through three straight seasons finishing outside the top four. Only in hindsight, they look like a developer refusing to flip a half-built property into a soft market.

Another reason the parallel works well is that a sports franchise is a scarcity asset. There are 20 clubs in the Premier League and 32 teams in the NFL, and supply does not expand to meet demand. The value comes from the fact that they aren't making more of them, which is why franchise prices keep compounding even when the team barely breaks even in any given year. A real estate investor is probably used to owning exactly this kind of asset and is happy to wait for it. It's possible that Kroenke is just an investor whose instincts happened to fit the asset class, but a trophy is a trophy and I'll happily take it.

The Taxman's Turn

This WSJ column makes a simple point that's easy to miss because the headline number on fees has gotten so small. You can now own the entire U.S. stock market for 0.03% a year, a figure that would have sounded absurd two decades ago. But over a 30-year holding period, taxes quietly do far more damage than fees ever did. The article quotes new research that finds that the market returned about 10.5% annually before tax from 1926 to 2025 and roughly 7% after, and that for someone investing today, compounding the gap implies "36% of your final wealth goes to the federal government."

What I find interesting is what the column says implicitly about the arc of personal finance. Investing has been a sequence of problems, each one solved well enough that the next becomes the binding constraint. First the question was simply whether ordinary households could participate in the stock market at all. Then, once they could, the question became allocation, how to diversify and size positions sensibly. Then it became fees, and indexing plus a price war pushed those toward zero. The fact that the live debate has now moved to taxes is itself a sign of progress, because you only start worrying about the fourth-order problem after the first three have been more or less handled.

The catch is that taxes are a different kind of adversary than fees, and the playbook that won the fee war doesn't transfer. Fees fell because competition is relentless: Vanguard cuts, everyone matches, and the saving is permanent. Taxes don't respond to competition at all (unless it's a regional competition across states) and they can rise back toward historically normal levels. The uncomfortable implication is that the order in which most people evaluate investments, performance first, fees maybe, taxes last if ever, is now almost exactly backwards. The frontier has moved, and unlike the fee frontier, this one won't be competed away any time soon.

The Sovereign's Float

This post by Hanno Lustig asks a deceptively simple question: where do Treasury holders actually sit in the U.S. government's capital structure? There is about $28 trillion of marketable Treasury debt, backed only by the full faith and credit of the United States, with no earmarked revenue and no bankruptcy procedure to enforce seniority. The core argument in the post is that because the government has also promised checks to 67 million Social Security recipients and 65 million Medicare enrollees, bondholders are not that protected (unlike a corporate setting).

What I'd add is that the cleanest way to see this is through insurance, which Lustig gestures at when he calls the modern federal government "a giant pension and insurance company with a small army." An insurance company funds its investments with float: it collects premiums today and pays claims later, so it is effectively borrowing from its policyholders to invest in productive assets in the meantime. The policyholder claim is the senior liability on that balance sheet, ring-fenced by regulation and guaranty funds, while equity and subordinated debt absorb whatever is left over. The federal government runs the same structure. Its policyholders are the retirees with indexed, senior claims, and the Treasury bondholders who provide the explicit borrowing are the subordinated tranche that takes the residual risk.