I thought I would share the various sites, books and podcasts that are currently helping to further my education on money, investing and life.
Each blog reference below is a link to a recent article I have enjoyed along with the actual blog site in parentheses.
It was the best of days, It was the worst of days (The Irrelevant Investor)
For those who enjoy investing quotes, you will probably have heard the phrase “Time in the market, not timing the market”. To be more blunt, choosing to dance in and out of the market is nothing more than a loser’s game. Michael Batnick, Director of Research at Ritholtz Wealth Management over at his blog, The Irrelevant Investor, provides some stunning data to convince you that a buy (through the market dips & upswings) and hold strategy for the long view investor is the way to go. The figure below says it all. From 1970 through early 2016, by missing out on the best 25 days (out of 11, 620), your returns would have gone down from 1910% to 371% or 6.7% to 3.4% annualized.
Wowza! For those familiar with the 4% rule, this could quite possibly be the difference between portfolio success and potential failure. Worth taking seriously, those who think they can hoard cash to time the market.
Home Country Bias: The Worst Offenders (The Reformed Broker)
Another great blog from Josh Brown, again an advisor at Ritholtz Wealth Management. Come to think of it, these guys over at this company have some pretty darn good stuff. Anyway, the author speaks to the topic of Home Country Bias in the post. That concept of holding the largest part of your portfolio based on companies within your country of residence. I have a basic position on this concept. And it goes like this. If you are investing in large multinational companies such as Apple, Google, Pfizer, Johnson and Johnson, Coca Cola, then there is a good argument that you are getting global diversification anyway. Another argument speaks to currency fluctuations with international investing therefore another reason to hold domestic versus foreign securities. Take a look at this figure showing the investor holdings in domestic equities relative to the global index weight of that country.
Those in the US are guilty for sure (Mr. and Mrs. PIE are not at all surprised with this data) but the author takes to task the Canadians and the Australians. Particularly striking percentages. Perhaps any Canadian, Australian readers would care to weigh in with commentary on this bias. For what it is worth, the source of the data that’s discussed in the post is from a Vanguard 2016 report. Given that Vanguard has over $3 trillion in global assets under management, the data-set appears to be very robust.
20 Cognitive Biases that Screw up your Decisions (UK Business Insider)
Mr. PIE has written on this topic previously. We make countless decisions every single day, generally with the thought that we are making these decisions in our own best interest. Not so fast. There are reported to be about 20 (!) behaviors that can really mess with your ability to make rational decisions. I’ll guarantee that you will be able to pick one or two at least from the list of 20 (I only show the first 4 here; please click through to the link to get the full list of 20) that may apply, or have been applicable, to your financial journey, investing approach or work situation.
A Letter to my Unborn Grandchildren (Jason Zweig)
Jason Zweig is a world renowned personal finance columnist for the WSJ and long-standing blogger. In this late 2015 post, he take a very personal approach by writing a letter to his future grandchildren about life lessons related to home and family that he learned from his parents. Aside from being a simply wonderful read, a couple of sections on home ownership resonated with me. To put it into context, many folks put forward good arguments and see home ownership as a terrible drain on finance and a real hindrance to your ability to build wealth. Fair comment to be honest. But there is more, much more. A few paragraphs spoke loudly to me:
A home is more than a house. In ancient Greece, home was synonymous with family, as in the House of Atreus chronicled by the playwright Aeschylus; in the Bible, the House of Israel symbolized an entire people.
“A rental doesn’t have the same permanence,” says Prof. Shiller of Yale University. “There’s an instinctive sense of territoriality shared by people and animals that a rental probably can’t fully satisfy.”
And a home is more than an investment; it is the place that helps shape who we are. Your generation, my grandchildren, may well be thankful that you don’t have to bear the burdens of owning a home — the mortgage, the maintenance, the pain of pulling up roots that run decades deep. My generation, and my mother’s, are thankful we had the blessings.
I can imagine a lot of emotion as we sell our current home in the summer of 2018 and relocate our family to the mountains where the next phase of our family life continues.
A home is indeed more than a house. The article by Jason Zweig is a beautiful personal piece that offers some reflection on why.
The Perfect Storm (Sebastien Junger)
No, it is not another tail of the financial meltdown of 2007-2009. This is the story of the Andrea Gail, a swordfish boat out of Gloucester, MA and its six fishermen that perished in what was dubbed the “perfect storm” by meteorologists in October, 1991. Sebastien Junger tells an amazingly detailed story of life on a swordfish boat. He also gets into the complex characters that are New England fishermen, their significant others and the demons they face before even setting foot on a fishing boat – drugs, enormous debt, broken relationships and alcohol. If you watched the movie with Mark Wahlberg as crew member Bobby Shatford and were riveted, the book will have you even more mesmerized. It is scary as hell and you will be in awe of the men and women who go out and fish the menacing waters of the North Atlantic.
OK, another link to Ritholtz Wealth management. Trust me, I have no affiliation with these guys, other than really liking the material they put out! This podcast is from Barry Ritholtz himself, the CEO. He has put together a series called Masters in Business where he interviews experienced folks from the world of finance and business. I often listen to these in sections on the way to work or during a lunch-time walk or on a long drive to our mountain home at the weekends. There are two podcasts that I have listened to over the last few weeks.
- Interview with Burton Malkiel, economics professor at Princeton University and author of the famous investing book “A Random Walk down Wall Street”. You may not know that Burt Malkiel wrote about and proposed the concept of index funds three years prior to John (Jack) Bogle founding Vanguard. This podcast is loaded with personal anecdotes on investing, great sound bites and a wealth of plain old common sense as it relates to wealth building. It is ~90 minutes long and worth every single minute.
- Interview with Kelly Coffey, head of JP Morgan US private bank. This institution manages >$850 billion in assets and thus this woman carries significant responsibility in the world of J P Morgan and global finance in general. She is also a sponsor of the asset management women’s network. If you are looking for a podcast that speaks to the power of cross-functional training, getting outside your comfort zone and a less than common career path, this one has it all.
Well, those are a few things I have been reading and listening to over the last month.
What about you? What have you found as great reading or awesome listening material this fine summer?