Welcome to the end of the week and another edition of Happy Hour! Just sit back, relax, and enjoy your end of the week roundup of all things interesting in the land of money.
Low And Slow
The stock market is built for the overnight sensation. It’s wrought with short-term focus. Markets move by the nano second now. The average holding period for a stock is less than one year. Yet most people are investing for an event like retirement decades down the road.
There are many reasons for this. The internet certainly helped with easier access to your portfolio, the advent of the 401k, an increase in job hopping, the funds (mutual, index, and ETFs), and normal human behavior. That future income security is only a button click from being liquidated at the wrong time. How much of that has influenced and added to this new stock market environment.
Seth Godin covered this perfectly with the importance of low and slow. It’s not easy in this fast paced world. Easily overlooked, certainly, yet it’s become so important. When you invest long-term, it helps to slow down and think long-term. And know how not to react short-term (probably the hardest). Time is a great asset when we use it correctly.
Learning From Buffett
Bill Gates dropped a note on Linked In about what he’s learned from Warren Buffett. It certainly offers a few insights into how Buffett thinks and what the richest man in the world views as important now that he’s running one of the largest and more successful charitable foundations.
To give you an idea, one of the projects his foundation is working on is how to feed 9 billion people several decades from now. When you have a multi-billion dollar war chest, you can look that far into the future. What it also shows us is a glimpse of the potential investment landscape 20 or 30 years from now.
- Charlie Munger’s 18 Biases That Cause You to Fool Yourself and Make Bad Decisions – great list.
- Possible versus Probable - understanding the difference is important.
- What You Don’t Know About Your Portfolio May Help You – goes great with low and slow.
- Wishing Upon A Star Manager Doesn’t Work – past performance metrics are just fund sales tactics.
- “Investing Is About Figuring Out What Somebody Is Doing Right And Paying Less” – interview with Joel Greenblatt for the Magic Formula investors.