If you're a fan of the late physicist Richard Feynman then you're in luck. Over the weekend I visited Bill Gates' website: gatesnotes.com and found an absolute treasure: Thirty years ago I went on vacation and fell for Richard Feynman. A friend and I were planning a trip together and wanted to mix a little learning in with our relaxation. We looked at a local university’s film collection, saw that they had one of his lectures on physics, and checked it out. We loved it so much that we ended up watching it twice. Feynman had this amazing knack for making physics clear and fun at the same time. … [Read more...]
US$ Print til’ You Die
You would never believe it today, but there was a time when The New York Times' editorial board supported sound money. And the person writing sound money editorials against a proposed Bretton Woods agreement was Henry Hazlitt. Today the first name that comes to my mind when thinking about The New York Times and monetary policy is the “print til’ you die" economist Paul Krugman. Contrary to the Keynesian crowd, Hazlitt believed it was irresponsible to make the dollar a reserve currency, as good as “gold”, knowing full well there would never be enough gold to satiate government spending demand. … [Read more...]
Why Rollover Your 401(k)
You wouldn't be the first person to wonder who in the world comes up with these phrases: "Rolling over your 401k." As if investing isn't confusing enough, the wording is so bad you can't help but think about a dog trick. This is supposed to be serious stuff. Most of you corporate warriors that have a 401k, and are in or near retirement, have figured out what a rollover is by now. It's when you transfer your 401k contributions into an IRA. 401k Contributions Are Free Money I love the 401k as a savings vehicle. It's a great way to get free money from your employer. But it is lacking big-time … [Read more...]
Good ‘Ole Vanguard GNMA
When times are tough, Vanguard GNMA (VFIIX) is a friend you’d never dream of living without. Check out the action for GNMA for just the first few weeks of this year compared to that of the more speculative NASDAQ Composite Index (both rebased to 100 at 12/31/2015). I don’t need any more than this to prove the importance of counterbalancing, in other words diversifying your portfolio with less risky assets like Vanguard GNMA. Remember, one of the keys to your success as an investor is to be an i-n-v-e-s-t-o-r. If you’re sitting on the sidelines you’re missing the boat on some wonderful income … [Read more...]
VIDEO: Will Credit Rating Agencies #FeeltheBern?
From Cato: Bernie Sanders wants to turn credit raters into nonprofits. … [Read more...]
The Fright of Squandered Capital
In the December issue of Intelligence Report, Dick Young wrote about helping investors protect and preserve their capital acquired over a lifetime. My focus, first and foremost, is on keeping you out of trouble. I do not write to needy investors—those who require the financial markets to make something happen to save their bacon—nor to novice investors or rank speculators. If you have been with me over the decades, you know that my primary concern is your comfort and security in your retirement years, whether today or in the future. In other words, my aim is to help you protect and preserve … [Read more...]
Transportation Index in a Bear Market
Over the last year, the Dow Jones Transportation index is down over 20 percent. The Transports index is loaded with companies that move goods across the country. It is a price weighted index meaning the highest priced stocks have the greatest influence on its direction. When I think of moving the goods, and how it relates to my family, I think of Christmas. This year, as in years past, Becky and I did a ton of our Christmas shopping online using Amazon Prime—with all those boxes our front hall felt like a fulfillment center. The leading components of the Transportation index are FedEx Corp … [Read more...]
Turn $200 into $7 million
A client shared this story with me last week: In 1935 Grace Groner purchased three shares of company stock in Abbott Labs. 75 years later, thanks to the power of compound interest, her three share purchase was worth $7 million. Grace Groner lived nearly her entire life in Lake Forest, Illinois, about 45 minutes north of Chicago. After graduating from Lake Forest College in 1931, Grace was hired as a secretary at Abbott Laboratories, where she worked for more than four decades. Grace never earned an amazing salary as a secretary. According to the Los Angeles Times, she got her clothes from … [Read more...]
Stock Market on Day One: 2016
Take a look at the first day of trading for 2016 and you’ll see the power counterbalancing can have on your portfolio. This is not a prognostication for the short-term price of gold—it’s a simply an observation of why I rarely sell positions that I value. … [Read more...]
How to Buy a Boat Part VI
A lot of great stuff happens when you’re on the water. It’s usually the things that you don’t plan which end up being the best memories. Like the time when I was shark fishing as a kid with my cousins, my uncle Ron, and my dad. My dad had a brand new pole. At one point he went down below to get some sandwiches and Uncle Ron began shouting, “Randy you’ve got a fish on your line!” Within seconds the pole was overboard. After lunch, Uncle Ron hooked onto to a sand shark and yelled, “Randy I’ve got something.” As it came into sight my dad said, “Ron! He’s got my pole!” The fish got away. But we … [Read more...]