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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…
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Liquidity is a short term risk. If you want to sell now, and nobody wants to buy, then you have liquidity risk. You have to lower the price until it’s attractive enough for someone else to buy it.
The issue with ETFs, index funds, and even actively managed funds, is the false impression that these funds are highly liquid when in fact they are only as liquid as the underlying assets. A high yield bond fund has the same liquidity risk as the bonds it holds. A microcap fund has the same liquidity risk as the microcap stocks it owns. Continue Reading…
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If you’re staring at your portfolio thinking now is the time to make some changes, I can say with almost absolute certainty you’re wrong.
A lot of people are thinking the same thing. It’s a popular view at the moment. That might sound like good news but it’s not. Following the popular path – where thinking and behavior are concerned – rarely ends well. Continue Reading…