OnceUSave

Gary Smith in his book, Standard Deviations talks about the evolution of peppered moths, usually found in nature as light-colored creatures. But that was not always the case. A trickle of dark-colored moths started appearing in 1848 England but by 1895, ninety-eight percent of the peppered moths found there were dark-colored. But by the 1950s, the pendulum startedContinue reading “Hardwired To Be Screwed”

Stocks are volatile. And a big reason they’ll remain volatile is because of where a stock’s value comes from. The value of a stock today is the sum of all the cash flows (dividends) a business (stock) will deliver to its shareholders in perpetuity, discounted to the present at the appropriate discount rate. Not toContinue reading “Capital Preservation And Growth Doesn’t Exist”

Recessions are necessary to clear out excesses. They are part of the growth cycle. They make sure that our savings get re-channeled into the right investments. They cause pain. They are supposed to cause pain. But that is a transitory pain. The world has endured recessions and depressions. A decent number of them will occurContinue reading “The Cardinal Investing Sin”

What if there was an account to which you can contribute money to before tax, invest and let the money grow tax-free and then spend that money tax-free? This looks like a fantasy setup but it is not, and you should know about it. Consumer-Directed Health Plans (CDHP) combine a High-Deductible Health Plan (HDHP) withContinue reading “Truly Tax Free”

You want to feel inflation? Try visiting a country like India every other year. I mean you are gone a while, but you only remember the prices of the past. Then you go there again and get price shocked everywhere you turn. Inflation, an ever-present tax on us, is structural in most emerging economies. TheyContinue reading “Stocks, Bonds, Bills & Inflation”

My daughters each have their own investment accounts, funded with a little bit of money they receive from allowances and gifts. And regardless of how disinterested they appear or seem to appear, I talk to them about the world and the goings in the markets at every chance I get. I am the boringest dadContinue reading “Nobody Wants To Get Rich Slow”

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”

JFK‘s father, Joseph “Joe” Kennedy, exited the stock market right before the 1929 crash when he heard his shoeshine boy give stock advice. He figured that if a shoeshine boy is giving him a rundown on what stocks to buy, the market has become too popular for its own good. That was during a timeContinue 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”