On the Biological Nature of Markets Photo: skeeze on Pixabay There have been five mass extinctions in Earth’s history. They occurred 444, 375, 251, 202, and 66 million years ago. You already know about the most recent extinction that took out the dinosaurs. Remember the asteroid? Perfect. But, what you probably don’t know is just how…
The Money We Don’t Talk About
On Financial Taboos Photo: Pixabay In March 2007, Elizabeth Warren gave a talk on “The Coming Collapse of the Middle Class.” Warren presented research on the changing income and expense structure of the American family and why this new structure was financially riskier than in prior decades. Despite all the anecdotes, data, and charts, it…
Just One More
The Importance of Knowing Yourself Photo: Pixabay I started drinking alcohol when I was 14 years old. It was the very first Friday night of my first week in high school. I headed to my friend Julio’s house because his parents were gone and my metalhead friends would be there. I arrived around 9pm to…
Nothing is Safe
How to Preserve Wealth Over the Centuries Photo: Magnascan on Pixabay Meb Faber recently wrote a post on the difficulty of staying rich. In it he states (emphasis mine): Research has shown that 70% of wealthy families lose their wealth by the 2nd generation, and a whopping 90% by the third generation. Granted, some of that is…
We All Make Mistakes
Why Even the Greatest Investors Are Not Immune From Error Photo: SplitShire on Pixabay Harry Markowitz. The man who popularized diversification with the creation of modern portfolio theory. In 1990, he shared the Nobel Prize in Economics with William Sharpe (the creator of the Sharpe ratio) and Merton Miller (of the Modigliani–Miller theorem) for “pioneering work in…
Nothing Happens, Then Everything Happens
On the Fits and Starts in Markets and in Life Photo: Pixabay After traveling the world for over five years aboard the HMS Beagle, Charles Darwin returned to England on October 2, 1836. You would think that after half a decade of documenting the unknown flora and fauna of the globe Darwin would sit down…
No Laws, Only Tendencies
The Difference Between the Natural World and the Investment World Photo: Pixabay Last week I attended a live Masters in Business taping between Barry Ritholtz and the famed investor Howard Marks. During the Q&A session, an architect in the crowd asked Marks, “How do you know where you are in the market cycle without paying…
The Easiest Retirement Choice
Simplifying What Matters When Saving for Retirement Photo: Unsplash Retirement. The Nobel Laureate William Sharpe called it the “nastiest, hardest problem in finance.” And it is. Between deciding how much to save and spend throughout your life, you also have to make guesses about the future. What will inflation be? How long will I live? What…
How to Invest a Lump Sum
A Deep Dive Into Investing Large Amounts of Money Photo: Pixabay So, it happened. You just received a lot of money. Maybe a relative passed away and left you a nest egg. Maybe you sold your business. Maybe you hit the lottery. Regardless of how you got the chunk of change you are currently sitting…
The Cognitive Aristocracy
What Should We Do About the Growing Intellectual Divide? Photo: Pixabay In the year 1900, the United States had a high school graduation rate less than 10% and only half of all children aged 5-19 were enrolled in any form of schooling. Why was school enrollment so low and virtually unchanged since the 1850s? Most…
