What is Your Financial Tipping Point?

On Understanding Your Financial Limits Photo: Pixabay It was 1949 and Fred Charles Iklé wanted to know why some European cities had been abandoned during World War II while others survived.  While traveling through war-torn Germany, Iklé discovered that the city of Hamburg was still inhabited despite losing 3.3% of its population and half of…

Why The Best Predictor of Future Stock Market Returns is Useless

On the Importance of Supply and Demand Photo: Pixabay In one of my favorite animal experiments, researchers wanted to see how pond cichlids would change their mating behavior as the sex ratio (number of males relative to females) was altered in a controlled environment.  Since cichlids are known for their monogamy and don’t desert their…

Exception To The Rule

On The Pitfalls of Exception-Based Investing Photo: Flickr He described the sensation as “a thousand knives” being driven into his body.  He knew cold, but not like this.  Charles Herbert Lightoller was treading 28 degree water (-2 Celsius) as he watched the Titanic slowly sink into the ocean.  Though he managed to climb aboard an…

Why You Don’t Know the Price Until You Sell

On Abnormal Markets and How to Prevent Forced Selling Photo: Pixabay It was 1935 and the Austrian physicist Erwin Schrödinger had a problem with Albert Einstein.  Einstein had just released a paper with two fellow scientists that discussed the concept of superposition, an idea that seemed somewhat absurd to Schrödinger.  Superposition implied that an atom (or…

One Decade Later

A Different Perspective on the Global Financial Crisis Photo: Pixabay When Lehman Brothers filed for bankruptcy I was in the back of my aunt’s Honda Odyssey headed north to start my first week at Stanford.  Of course, I didn’t know about Lehman at the time and I also didn’t know much about banking or investing…

Nothing Into Something

Why Your Time Horizon Isn’t Long Enough Photo: Pixabay No one knows exactly how Sam Zemurray came across his first banana in 1893, but he knew it was special.  In fact, Sam became so obsessed with the yellow fruit that he traveled to Mobile, Alabama two years later in hopes of entering the banana trade.  Unfortunately,…

An Investment To Die For

On Reverse Life Insurance and Regulating Controversial Markets Photo: Still Life With A Skull, Philippe de Champaigne (Wikimedia Commons) Imagine you are 25 years old and you have just been diagnosed with a terminal illness.  Your physician says that you have 6-12 months to live.  The shock begins to set in as you start to…

What Will Always Be True

On Order Within the Universe and What It Means for Investors Photo: Pixabay In their natural environment, every mammal gets 1 to 1.5 billion heartbeats.  This is true of the half ounce Estruscan shrew to the 180,000 pound Bowhead whale.  Even humans, before the advent of sanitation and modern medical technology, got about 1 billion heartbeats…

Five Writing Tips to Sound More Eloquent

How To Improve Your Writing With Simple Rhetorical Tricks Photo: Pixabay I didn’t used to be a good writer.  Just read this post, this post or this one.  Actually, don’t.  But, you will notice that I got a lot better starting in late 2017.   How did this transformation occur?  Two things:  I started using stories…

We All Have It Now

On the Democratization of Information Photo: Pixabay In 1815 a mountain called Tambora erupted on the island of Sumbawa in Indonesia.  Between 70,000-100,000 people were killed in the resulting blast that was estimated to be 150 times larger than the explosion at Mt. St. Helens.  The eruption was so massive that it changed the global…