Waylon Jennings can teach you a lot about being a successful investor. The most important part of Jennings’ success was his go-it-alone, do it himself strategy. Jennings didn’t attempt to sound like anyone else, he charted a musical course that was unique to him. He avoided the herd, and made his own decisions. That’s how I want you to invest. In March 1995, I wrote of Waylon and his success: “Well, I Nearly Got Caught at a Burger King.” “And a couple of times on a plane./I thought I was safe from detection with all of the weight I had gained./But walking around in a jumpsuit—that didn’t … [Read more...]

“If ye are prepared ye shall not fear,” is from the Doctrine and Covenants of the Church of Jesus Christ of Latter-day Saints and is quoted in Prophetic Statements on Food Storage for Latter-day Saints, by Neil H. Leash. In the forward to Leash’s book, Duane S. Crowther, author of Inspired Prophetic Warnings, advises to avoid fear and anxiety by making sound preparations, and to approach the subject with an “urgent calm” rather than anxiety and alarm. Leash and Crowther aren’t simply talking about food storage. They’re talking about preserving your well-being beyond food, including money … [Read more...]

  Let the good times roll? Great lyrics from the Cars but it’s a song I can’t get out of my head thinking about the money piling up by the truckload at Vanguard’s back door. We’re talking nearly $300 billion in the first nine months of this year alone. All of that money unloaded and stacked up with the rest of the $4.7 trillion at the firm. That’s a lot of confidence in one company. And maybe Vanguard deserves it thanks to the tireless work of founder Jack Bogle on the power of low cost index investing. But where is all that money going? As I’ve stated in my piece last week on … [Read more...]

I have grave concerns about the survival of annuities. I like what Dennis Beaver writes at the Hanford Sentinel: For anyone thinking of moving a large amount of money from a retirement account into an insurance annuity at this time, it could be a terrible decision. “You’ve got to think this over very carefully. Do not be conned by a salesman looking only for a huge commission on the sale of an annuity, and, absolutely do not put all your eggs in one basket!” warns New York attorney Edward Stone. As one of a handful of lawyers in North America who specialize in life insurance/annuity … [Read more...]

The NFL has a lot in common with investing. Both can be rough sports. You can get beaten if you’re not at the top of your game. That’s why a methodical approach is necessary to win both on the field and in the markets. Back in 2002 I wrote about the inspiration former Cleveland Brown’s football coach Paul Brown has given me during my years of investing. Read on about how Brown used a focused, methodical approach to build a football dynasty. Former Cleveland Brown’s coach, the legendary Paul Brown, was a full professor. And Professor Brown taught his football players a systematical/methodical … [Read more...]

I couldn’t help but laugh to myself recently when I read an article in a major business publication about banks selling structured notes linked to FAANG stocks. The only thing more complicated than an explanation of the business case for some of these tech stocks is a structured note based on their performance. It’s the opposite of my small-town Vermont axiom “Simple is Sophisticated.” Any investment plan you make should work hard to eschew the use of such exotic investment products (they’re called products because they are sold to consumers). Instead you should focus on an investment plan … [Read more...]

In a market where a narrow band of equities is producing the lion's share of gains, it can be tempting for fund managers to chase those stocks because of their fear of missing out, or FOMO. That FOMO can cause managers to do things they wouldn't normally. Charley Grant discusses some of this activity in the market at The Wall Street Journal. He writes: Fear of being left behind is a powerful force among fund managers, even if it means taking big risks. This year, managers not invested in tech stocks should be polishing their résumés. In the first six months of the year, technology shares … [Read more...]

Many investment gurus, panelists, and wunderkinds attempt to prove, day in and day out, that they are smarter than the market. Often they suggest that if you simply buy when they buy, and sell when they sell, you will have investment success. But reality is that most of the time, such market timing behavior leads investors into playing a losing game of catch up. They often end up chasing the market and buying near the high, then selling near the low for the same reason. In 1992 I warned readers about the dangers of trying to outguess the market. I wrote: How many investors are lucky enough … [Read more...]

History has a way of repeating itself. In early 1995 I wrote about a math professor named Tom Nicely, who worked at Lynchburg College. Nicely was examining prime numbers using a group of five personal computers. While four of the computers gave Nicely the correct answer to a problem, 1.2126596294086, the fifth turned up a slightly different answer, 1.212659624891157804. The cause of the fifth computer’s error was the Intel Pentium processor installed on it. Nicely called Intel to explain, but was given the cold shoulder. Next, he did something which at that point was still novel, he asked … [Read more...]

The WSJ reports that the IPO market is booming. There have been 120 companies that have raised $35.2 billion in the first six months of 2018. That’s the fourth-busiest six-month period on record. And that’s not even counting initial coin offerings (ICOs) which are booming as well even as bitcoin prices plummet. Rising IPO volume isn’t necessarily a predictor of a market top, but it should be viewed as a signal of caution. “Our global IPO pipeline is stronger now than it’s been since the financial crisis,” said Evan Damast, global head of equity and fixed income syndicate at Morgan … [Read more...]