You can stack the odds in your favor. At its root, buying above average yields means the “market” or index yields less. Your task is to root out the higher yields, a contrary stance, and pick the winners from there. Your work has just begun. Because relying simply on the highest dividend yields is a fool’s errand. If the top dividend payers were always the top performers then investing would be easy. You and I know that’s false. What Dick Young has taught you, and tens of thousands of investors like you, is that a large part of investing involves art, not science. In baseball, there’s … [Read more...]
Cryptocosm and Life After Google Part III
You instinctively know something evil is going on when a company’s motto is “Don’t be Evil.” As we learned in parts I and II when Google offers you “free” services (Gmail for example)—you’re the product. Will Google be able to compete against a cryptocosm several orders of magnitude larger than it could ever become? At the heart of the matter is big data. Googlers feel big data has all the answers—but big data is no match for human touch and emotional intelligence. Would you trust software to drive your family today? At the heart of self-driving cars is a battle of software (Google) vs. … [Read more...]
Cryptocosm and Life After Google Part II
What we learned in Part I is there will be Life After Google as explained in futurist George Gilder’s book by the same name. Because when we use Google’s products for free, you and I give them a free pass to do what they will with our data. Who are we to complain if Google mishandles security of our data? “You fools it was free,” they counter. But what if there’s a universe, a cryptocosm, that provides search on a much larger scale where we own our data through a blockchain? Imagine musicians, artists, and other creators whose work has been essentially stolen by the “everything is free” … [Read more...]
Is Computerized Groupthink Endangering Markets?
Markets have become more volatile in 2018 than they have been for some time. I hope you'll reread this post I wrote on September 7, 2018 and reevaluate the risk in your portfolio today. I have written to you before about my unease with program trading, especially stop losses (see here and here). Add to that the algorithmic groupthink of computerized trading and it's a nasty brew. Today the Wall Street Journal's Stephanie Yang reports: On Feb. 5, the Dow Jones Industrial Average suffered its worst one-day point-decline in history amid a tumultuous week for global markets. Although the … [Read more...]
Are You as Comfortable with Your Stocks as You Are Your Home?
The DJIA was up 545 points the day after midterms. The takeaway is that you should be comfortable with your portfolio on good days and bad. Think about where you live for example. Your home. Do you call your real estate broker when prices drop (see Zillow) for the month? Probably not. If you do, perhaps it’s a spec investment rather than a home to raise your family in. Consider your portfolio as you would your home or your family—it's something you nurture and allow to grow over your lifetime. Investing takes strength and conviction as do parenting and home-ownership. They're not for the … [Read more...]
Retirement Benefits: They’re not all in Dollars, Part II
You know, not all retirement benefits are in dollars. I received this email last week: “Season ending ‘last and fast’ Pantera run over Togwotee Pass (9700 ft.) with a few of my car guy buddies. Here’s some more pics of the 1972 DeTomaso Pantera recently featured in Hot Rod. Hot Rod's Richard Prince wrote: Some of Marty Quadland’s earliest memories involve sitting in the family’s 1935 Ford cabriolet with both hands tightly gripping the steering wheel as he belched out a four-year-old’s version of a V8 exhaust note. Later on, as a way of dealing with his motion sickness in the … [Read more...]
Maine’s Governor wants to Live in Florida, Here’s Why
The low taxes and warm weather of Florida have enticed millions of retirees to the Sunshine State. Now, Maine's term-limited governor, Paul Le Page has told the Portland Press Herald that he'll be the next Northeasterner to become a snowbird (heading south in the winter and spending summers in the north). When asked about his plans, Le Page answered in a way that many retirees would understand, according the Press Herald he stated: “I’ll tell you very, very simply: I have a house in Florida. I will pay no income tax and the house in Florida’s property taxes are $2,000 less than we were paying … [Read more...]
What’s the Best Investment (For Your Vote)
America's economy has been roaring, but with the midterm election tomorrow, the direction of regulation and tax policies could change drastically. Here, according to The Wall Street Journal are the areas with the most at stake in tomorrow's election: TAXES: The Trump administration wants to make permanent new income tax cuts for individuals passed last year, a move that Wall Street analysts say could bolster consumer confidence and lift prospects for retailers, auto makers, tech firms and other consumer-goods companies. But the White House will need Republicans to retain control of … [Read more...]
Jobs, Jobs, and More Jobs
On the campaign trail recently President Trump touted a new slogan, Jobs not Mobs, and he has delivered. Today's Employment Situation Report from the Bureau of Labor Statistics detailed October's strong gain of 250,000 jobs. Unemployment remains at 3.7%, matching the lowest rates since 1969. Combined with strong wage increases reported earlier this week, the strong job report has set stock futures rising. You can read the full BLS report below. … [Read more...]
Still Sure Indexing is Right for You?
I have been warning investors of the dangers of indexing for some time. With correlations among assets down near all-time lows, it is only a matter of time before something has to give. Now what seemed like a safe bet has become a volatile up-and-down roller-coaster ride for investors. The Editorial Board of The Wall Street Journal writes: Stocks bounced back Wednesday, but before that the tech-heavy Nasdaq had slumped 12% since its August peak. Falling FAANG stocks—Facebook , Apple, Amazon, Netflix and Google parent Alphabet—have swung the S&P 500 into a correction zone. Netflix tumbled … [Read more...]
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