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The bull market in stocks turned seven years old this week and nobody noticed. The Wall Street Journal pointed out the anniversary, then proceeded to ask why aren’t people more excited? Of course, the article cites a long list of things to worry about as the reason. It’s not necessarily wrong, but it’s not right either. There’s always something to worry about.
The real reason is much simpler. It’s hard to get excited about something you missed. Continue Reading…
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Popularity is fleeting. For some, it only lasts the proverbial “15 minutes”. For others, it drags on longer than any rational person can comprehend.
We see this in people and things. It explains why fads come and go. It eventually ends because there are not enough new eyeballs to replace the ones that lose interest or something newer and shinier comes along to draw our attention away.
Ben Graham noticed this popularity effect on stocks and briefly covered it in The Intelligent Investor: Continue Reading…
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Politically speaking, I’m agnostic. Both parties do a great job of making fools of themselves and I do my best to ignore it to maintain sanity. That’s not to say they don’t have a decent idea now and then, but it happens so rarely of late it’s really not worth spending much energy on it.
Really, it’s mentally exhausting. Emotionally, it must be a nightmare and it defies common sense. And yet people still get emotionally attached.
But this is not a political post. Continue Reading…
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There’s always something to learn from Warren Buffett’s annual letters. He’s built a library of successes, failures, and accumulated knowledge from almost four decades of letters, which you can borrow from at any time. And, frankly, you can’t beat the price of free.
Typically, when I read the annual letters, I print it out, grab a pen or highlighter and dig in. Afterwards, I re-read all the areas I marked up and write out some notes. Five big takeaway’s from this year’s letter are highlighted below. Continue Reading…
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What would Warren do? Now there’s a question. Safe guess, it’s not what most people would do.
Tomorrow (i.e. Saturday), the most anticipated annual letter is published. You can find it here.
Why Saturday? Because of what Warren doesn’t do. It prevents shareholders from making rash decisions without thinking through the annual results. Investors are forced to reflect all weekend before they act on Monday. Continue Reading…
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Optimism has a funny way of feeding off itself sometimes, bleeding into enthusiasm and excess. You’ve seen this story before with the internet boom and the housing bubble.
But before that, it led to the rise of the 1920s, where people like John J. Raskob fueled the easy money market that “Everybody Ought to be Rich”. Raskob’s bold claim in the August 1929 issue of Ladies’ Home Journal was typical for the time: Continue Reading…