Over the past year, the total return for Vanguard Wellesley has been just over five and half percent. “Five and a half percent? What’s so great about that,” you might think. Well, it can be great if you’re a patient investor and you allow the miracle of compound interest, what Albert Einstein is said to have referred to as the eighth wonder of the world, to work its magic for you. Father Time can be your friend, as I will explain in a moment. Yesterday, I was speaking with a client whom I’ve been working with since his mid-50s. He’s in his early 70s now but it hardly feels like close to … [Read more...]
Facebook: “A Giant Blood-Engorged Tick Hanging off Your Frontal Lobe”
“Designed to be addictive, Facebook feels like a giant blood-engorged tick hanging off your frontal lobe,” writes Matt Taibbi in Rolling Stone. You may recall, Taibbi coined Goldman Sachs as a “[G]reat vampire squid wrapped around the face of humanity.” In his piece on Facebook, where the median salary is $240,430, Taibbi makes a case for breaking-up the band which is more like a cult. What is it like to be on the inside of Facebook’s corporate walls? Former senior Facebook worker Antonio Garcia Martinez wrote the book, Chaos Monkeys, in a way that Michael Lewis did about his time … [Read more...]
Meet a Long-Time Friend and Advisor: The Stissing, Mountain Man
You Might be a Mountain Man if… If you live on a mountain and regularly send pictures of nosy black bears sniffing around your front door and casually note in your email: “Had some visitors last night,” then, you might be a mountain man. Meet Tim Jones. He is: “The Stissing Mountain Man.” Tim Jones lives on Stissing Mountain, located in the Hudson Valley in Pine Plains, New York. I met Tim when his son, also Tim, began working with us 11 years ago. I’ll refer to them as Tim Sr. and Tim Jr. for this piece. You know when you meet someone and there’s a genuineness where you know they … [Read more...]
Yes, Vanguard is too Big: Part II
Has there ever been a bigger supporter of Vanguard than Dick Young whom, unlike other promoters and hucksters out there today, never had a horse in the race? And could there be a better triple play combo than Wellington Management, Vanguard, and Dick Young’s approval? Vanguard’s low-cost expense ratios, no 12b-1 fees, and its history with Wellington Management were, among other valuable investor tenets, enough to recommend Vanguard to you. Buying Vanguard Wellington and Wellesley was simple. Owning them gave you a balanced portfolio with a stock to bond mix of 60/40 or 40/60. There … [Read more...]
Bitcoin Diehards are HODL
"After bitcoin’s frenzied rally last year, prices have lost about two-thirds of their value from a December high. The cryptocurrency had been trading around $7,000 in recent days, although a sharp jump Thursday morning briefly lifted the price above $7,900, according to CoinDesk,” writes Steven Russolillo in the WSJ. “Nonetheless,” he continues, “in the past few months, bitcoin has faded off the front pages of newspapers and it no longer dominates people’s social-media feeds. Global internet searches for the word “bitcoin” have fallen by over 80% from December, according to Google … [Read more...]
Emergency Cash: Bitcoin or Dollars?
Originally posted on December 1, 2017. Bitcoin is being considered by some as their emergency stash. For me, when the power goes out, I prefer having dollars on hand. ATMs will be out of commission, and depending on road conditions, even if my bank is open, I’m not sure I’ll be hitting the streets to make a withdrawal. One of the many hurdles bitcoin faces is frictionless exchange. It doesn’t have the general acceptance by society yet like the dollar, and to achieve that acceptance will be a monumental task. In an emergency situation, I want to be able to have cold hard cash on hand … [Read more...]
Vanguard GNMA and Your Retirement Years
When the financial crisis destroyed the stock market in 2008, guess which fund weathered the storm? You guessed it Vanguard GNMA. When the tech bust destroyed the stock market at the beginning of this century, guess which fund weathered the storm? Right again, Vanguard GNMA. That’s two huge busts in the stock market so far this century. Many mutual funds focus on 10-year performance. As 2018 moves forward into 2019, the brutal losses of 2008 will be rolled off, and investors may not see the risk inherent in stock funds as they make their allocation decisions. But a retirement lasts … [Read more...]
Yes, Vanguard is too Big
A gorgeous, sunny, good morning to you from Newport, RI. Isn’t it amazing what a little sun can do to one’s psyche? Last week I told you how my SEP-IRA contribution was incorrectly deposited to my traditional IRA by Vanguard. Lucky for me, I caught their mistake early and avoided a potential paperwork hassle come tax-time next year. I chalked the error up to the fact that Vanguard is in the transaction business and mistakes happen. But in thinking about the issue further, I probably caught their mistake because I do this for a living. Which makes me wonder: is the average investor paying … [Read more...]
This Book is a Fixture in My Office
“The more flippant the investing cliché, the more you should question it. Consider ‘the bigger they are, the harder they fall.’ At their lows this week, the technology shares that have until recently been the stock market’s darlings — Facebook, Amazon.com, Netflix, Google’s parent company Alphabet and other giants — had fallen more than 17% since March 13. Over the same period, U.S. stocks overall fell 8%,” writes Jason Zweig in his weekly column The Intelligent Investor. A fixture in my office is the book Security Analysis written in 1934 by Ben Graham and David Dodd. Zweig notes, “As the … [Read more...]
April 2018 RAGE Gauge Report
When you’re in the gun business is there a better salesman than former Supreme Court Justice John Paul Stevens? With Stevens talking about repealing the Second Amendment, it’s no surprise background checks, a precursor to gun sales are, are up. The risk trend in my RAGE Gauge analysis is up too across the board, except for one metric, unemployment. Thank you, Mr. Trump. Continue to invest with caution. By the way, did you see the unemployment rate numbers for Elkhart-Goshen, Indiana? It was 16.7% in October 2009 and is around 2.7% today. The RV business is humming. Originally … [Read more...]
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