Category Archives: General Investing

Fresh out of school and ready to take on the mean, bad world, you go find yourself your dream job. And with that comes access to a workplace retirement plan like a 401(k). Not all employers offer one but then you deem yourself lucky. So, an enlightened 25-year-old that you are who knows what timeContinue reading “Taking Market Declines In Stride”

Ralph Wagner, the legendary manager of the Acorn Fund, once likened the stock market to an excitable dog on a long leash in New York City, darting randomly in every direction. The dog’s owner is walking from Columbus Circle through Central Park to the Metropolitan Museum. But at any given moment, there is no predictingContinue reading “Price vs. Value”

A business makes capital allocation decisions such as expanding a factory or investing in new tech with the intent of recouping that investment over a timeframe that spans years and decades. Not all capital allocation decisions pan out but the process that is followed is with the intent of getting as high a return onContinue reading “A Bias Towards Inaction”

Let me introduce you to Jason. He retires in the year 1969 with today’s equivalent of a million dollars. That is, he retires with an amount of money that has the same purchasing power as what million dollars buys today. And he knows a thing or two about the ravages of inflation and hence, toContinue reading “Sometimes, The Year You Retire Can Make A World Of Difference”

Say you decide to play blackjack with a friend, and you play to a point where one of you wins everything from the other. And say the game starts with $100 from you and another $100 from your friend and ends when either of you goes home with $200. The net wealth in the systemContinue reading “Positive-Sum Games”

You think you’ll spend like this… But instead, you spend like this… Retirement experts who’ve studied this say that we spend in three phases… The go-go years are your first set of years in retirement. You play, you travel, you spend. Then you start to slow down. Your spending naturally declines. And then you reallyContinue reading “The Retirement Spending Smile”

Cockroaches are the ultimate survivors1. They can live without air for an hour, without food and water for months. They can survive the Arctic cold. Ice ages and continent shifts mean nothing to them. It is no surprise then that the cockroach as a species has been around for 300 million years and it isContinue reading “Plan Like A Cockroach”

Buying businesses (stocks) is not about winning popularity contests. In fact, the more popular a stock or a category of stocks is, the less likely its price matches its value. Pay too rich a price for a popular business du jour and you could be sitting on that business forever, never to be made whole.Continue reading “Sidestepping Bubble Stocks”

Cookie-cutting the investing process does not work. Take for example someone who is a Federal government employee and we know what that entails – a rock-solid job security with access to an equally rock-solid pension plan. So, assuming she continues to work there till she retires, should she ever own bonds? And we know theContinue reading “Prepackaged Portfolios Are Seldom Optimal”

San Luis Obispo has one of the cutest downtowns in California. A must try there if you are ever around is a Turkish pastry shop called Lokum. So, so good. On a stroll to one of the many beaches there, I happened to come across a long-retired couple, likely in their seventies, voluntarily cleaning upContinue reading “Retire To Something”