It’s always about the math, which unfortunately is often counterintuitive.
Dollar Store Investments and Insurance Policies
The bottom line is that no purchasing decision can be made based on just one number. In the case of investment performance, demand to know BOTH the risk AND the reward. As for the American health care system, Stein’s Law kicks in and defaults to single payer for the 99% when the money runs out.
What Moves Stock Prices?
“On a day to day basis, however, only a small minority of largest moves are associated with what appears to be unexpected fundamental information regarding the economy. The mystery is only deepened by the offsetting nature of many of the largest moves.”
Volatility is Much Higher in the Short Term
This is the single biggest advantage of investing, rather than trading.
The little guys will always outperform the professionals
Bradford Cornell writes, “In fact, if individual investors accept their limitations and act wisely, they will always outperform active professional investors on average! Furthermore, this surprising conclusion does not depend on complex economic arguments involving market efficiency or rationality: it is a direct result of basic arithmetic.”
Biz Stone on the evolution of Twitter $TWTR
The Twitter IPO is coming, at a price per share between $17 to $20. Co-founder Biz Stone gave a good interview this morning, more than the usual blah blah.
Underfunded Entitlements and Generational Theft
As the U.S. gears up for the next debt ceiling shutdown, it is important for Gen X, Gen Y and Millenials to reject entitlement reforms that continue paying unfunded benefits.
If you were born after the late 1940s, it’s time to take a hard look and start saving.
Chart of the Day: Social Security Ends in 2024
In 1983, Social Security’s trustees projected that the recently enacted Social Security reforms would keep the program solvent for at least the next 75 years through 2058. However, over successive annual reports, that approach date has accelerated … to 2024.
Alan Greenspan on Risk, Human Nature, and the Future of Forecasting
Greenie has a new book out, and is making the obligatory stops to promote it. The “map and territory” part of the title is reminiscent of John Magee’s great book — way better than the one he co-wrote with Robert Edwards — the General Semantics of Wall Street (reprinted as Winning the Mental Game on