WARREN BUFFETT doesn’t have the best investment record over the past three decades. That accolade apparently belongs to Jim Simons. Buffett also isn’t the world’s richest person. In fact, he hasn’t held that title for the past dozen years and currently ranks No. 6, with barely half the wealth of today’s richest person, Jeff Bezos.
I doubt Buffett feels bad about this. Is your surname neither Simons nor Bezos? I don’t think you should feel bad,
THIS IS AN ARTICLE about not writing an article. It started with a Vox piece about the changes in society wrought by the 2007 introduction of the iPhone. One graph that caught my eye showed chewing gum sales steadily declining from 2007 to 2017, which was when the Vox article was published.
No economist would ever tie an economic trend to any one factor, but the article proffered an interesting hypothesis. It suggested that,
I SPEND WAY TOO much time analyzing what went wrong and how to do better. Instead, I should probably focus more on what went right and how to do it again.
This tip came from a close friend, when I told him about my money mistakes. My friend’s logic? Despite my missteps, I must have done a few things right to offset the damage.
He had a good point. There are three things I did that paved my path to financial freedom.
JIM AND I RECENTLY moved from Granada, our first home in Spain, to Alicante, a city by the Mediterranean. The move gives us the opportunity to walk along the coast each day.
A few weeks ago, we hiked a rugged coastal trail that’s part of a nature preserve, with an ancient Roman dock still partially visible. Along the coastline, you can also see how layers of sand have built up over the centuries, compacting together to form the breathtaking sandstone hills we enjoy today.
ONE OF THE KEY skills I quickly learned as a new parent: how to curb some of my emotions. Take last night. We were enjoying our normal bedtime routine, including bath time, bottles and a few favorite books.
Then I was vomited all over.
Being vomited on was just another evening with our 16-month-old twins. If you dial up or down your emotions too much in response, they have you. Dial them a bit too high,
BASEBALL USED TO BE a game where managers would go with their “gut.” But Brad Pitt changed everything. In the movie Moneyball, Pitt played Billy Beane, the first baseball general manager to use data analytics to great success—and suddenly it was all the rage.
Today, from a typical game, seven terabytes of data are gathered, everything from the arm angle of every single pitch to the exit velocity of hit balls.
“IT WAS THE MOST stressful time of my career, but also the most rewarding.” I heard that comment, as well as variations on it, from many bankers over the past few months as they talked about PPP, or Paycheck Protection Program, the federal loan program launched to help ease the financial distress caused by the pandemic.
PPP has been criticized because not all the money has ended up with companies it was intended to help.
WHEN I THINK BACK to Finance 101, what I recall—more than anything—is a whole lot of formulas. First came the calculation for present value, then formulas for valuing bonds, stocks, options, futures, forwards and all sorts of other financial instruments.
This was interesting. But with each passing year, I’ve come to realize that this introduction to finance was also incomplete. It was incomplete because—to state the obvious—the real world doesn’t always adhere to formulas.
OUR MOST PRECIOUS resource is time. I’m determined to waste as little as possible.
Unless we’re at death’s door, none of us knows how much time we have, but we all know it’s limited. Yes, money is also limited—but, if we squander money, there’s always a chance we can make it back. Time lost, by contrast, is gone forever.
My preoccupation with time and its dwindling supply has grown as I’ve grown older. I may be patient with my investments,
MORGAN HOUSEL’S new book, The Psychology of Money, covers a host of topics related to money and emotion. I was especially drawn to his notion that “how you behave is more important than what you know.” I’ve been a student of behavioral finance for some time and know this to be true academically—but it also made me think of my father, Ole.
My father was born in 1948 into extreme poverty.
IT’S THAT TIME of year again, when Wall Street strategists begin publishing their market forecasts for next year. If you’re wondering whether to put any stock in those glossy publications, here’s my recommendation: Think back a year to the forecasts issued at the end of 2019. Did any of them predict that a virus would come out of left field, throwing the economy into recession, triggering a bear market and killing more than a million people worldwide?
I’M NOT MUCH of a bartender. But when my wife and I hosted an art show in Missoula for a friend, I got the chance to serve wine while meeting a whole new group of people. Bankers—my usual social circle—tend to be strait-laced analytical types, so it was entertaining to spend an evening meeting creative folks from our thriving arts community.
One young couple, who sported an array of tattoos and piercings, had a story that caught my attention.
KEEP AN EYE on the neighbors. They could be the reason you’re poor and unhappy.
We all like to think we’re independent thinkers who weigh the evidence and reach our own conclusions—and yet there’s ample evidence that our views are heavily influenced by those around us, whether we’re choosing presidential candidates, bottled water or mayonnaise. This extends to financial matters, sometimes with grim consequences.
Stocking up. Studies have found that those who live near one another tend to invest in a similar fashion.
WHEN I THINK about investment advisors selling high-fee products, it brings to mind the story of two politicians who were shouting at each other. One of them stands up and screams, “You’re lying!” The other one answers, “Yes, I am, but hear me out!”
In my 40 years of investing, I’ve bought into some questionable sales pitches. You’ve heard them: “The easy money’s been made. It’s going to be a stock picker’s market going forward.” Or: “Only losers are satisfied with just earning the market averages,
I’D LIKE TO TELL you about a unique new book. How I Invest My Money is a compilation of personal money stories shared by 25 investment professionals. The book takes its title and inspiration from a 2019 blog post by investment advisor Josh Brown, a widely followed author and TV commentator.
Brown’s motivation: After years of on-air commentary, discussing every conceivable financial topic, it occurred to him that no one ever asks investment people how they invest their own money.