Category Archives: General Investing

Up until the 1890s, horses and buggies ruled the land. There were incremental innovations within that ecosystem but nothing transformative. Then Henry Ford came along with the Model-T car and the buggies were history. Gutenberg’s invention of the printing press in the 1450s drove the manuscript writers out of business. I mean before that, you’d have armiesContinue reading “Creative Destruction”

Investing is like planting a tree. You put in the effort once and then the fruits keep on coming. That is akin to buying stocks. Dividends are the fruits, and the tree is the business behind the stock that pays those dividends. Stocks are deemed as perpetuities (dividend stream continues forever), but we all knowContinue reading “Commodities Are Never Investments”

There is this famous story of Joseph “Joe” Kennedy (JFK‘s father) exiting the stock market right before the 1929 crash when his shoeshine boy started giving him stock tips. He figured that if a shoeshine boy is giving him a rundown on what stocks to buy or sell, the market has become too popular forContinue reading “Spotting Asset Bubbles”

Abraham Maslow describes in his groundbreaking 1943 paper a pyramid of needs that must be met in more or less a sequence before human beings can realize their full potential. Food, clothing, and shelter form the base of that pyramid. Friends, relationships, self-esteem, and a need to belong form the next set of rungs. TheContinue reading “The Economic Value Chain”

Your identity will never be stolen – until it does. And once your thing is out there, it’s a mess. You thought you cleaned it up and then it pops up again. Millions fall victim to identity theft. You don’t want to be them. And we can get insurance against identity theft using precautionary measuresContinue reading “Freeze Your Credit”

Treasury bonds are issued by the federal government. Bonds with a maturity of one year or less are called Treasury bills but we’ll keep calling them bonds. So, say the year is 1999 when one-year Treasury bonds paid 4 percent as interest. If bonds with a maturity of one year paid 4 percent, you wouldContinue reading “Risk & Return”

Berkshire Hathaway class A shares trade at hundreds of thousands of dollars. That is the price for each share. Apple shares trade at hundred and some dollars a piece. And the shares of Uber trade at a twenty plus dollars. So Uber stock is cheaper than Apple stock and Apple stock is cheaper than BerkshireContinue reading “Stock Splits Don’t Make Stocks Cheaper”

Crypto is not an investment. It can never be an investment. The United States dollar is not an investment. The Japanese yen is not an investment. The Euro is not an investment. None of these are investments. They are all currencies. The latter ones at least are. Crypto is not even a currency. Anything thatContinue reading “On Crypto”

Economist Hyman Minsky once wrote that stability leads to instability. The more stable things become, and the longer things remain stable, the more unstable the system gets until that eventual crisis hits. That makes sense. When there is never a risk in sight, when everyone is fat and happy is when the potential of instabilityContinue reading “On Bear Markets”

My first exposure to a stock market boom and bust cycle was back home in India in the early 1990s in what was deemed the ‘Harshad Mehta’ scam. It was a classic pump and dump scheme that was financed by fake bank receipts which Mr. Mehta’s firm brokered in transactions between banks. He used theContinue reading “Pascal’s Wager”