Your Survival Guy just finished reading Climbing the Vines in Burgundy: How an American Came to Own a Legendary Vineyard in France about Alex Gambal’s journey in the wine business. Not that he needed to do it. He wanted to. He left the family commercial real estate business and with his young family became entrenched in all things Burgundy. It’s a detailed account but not necessarily a happy one. As with nearly all entrepreneurs, it involves sacrifice. One small comment that stood out to me was how the locals like the store-bought chicken not the much sought-after poulet de Bresse. You can … [Read more...]
CAUTION: Investment Extremists Can Get Wiped Out
In 1985, America was just coming off one of the worst bouts of inflation in its history. Much as today, with inflation trailing off but still a worry in everyone’s mind, an argument naturally broke out between extremists in the financial media over whether America was poised for reignited hyperinflation or a deflationary death spiral. I had recently pioneered the Financial Armadillo Strategy and was asked to add my voice to the discussion with an op-ed in the June/July 1985 issue of Reason magazine. Instead of piling on with more extremism, I wrote: In the last decade, the world economy has … [Read more...]
Make Sure You Get Paid to Invest in Stocks
Your Survival Guy wants you to be paid to invest in stocks. Think of investing as collecting cash, much like a landlord collects the rent. Too much weight is given to prices. Prices are a qualitative event. They’re opinions. Show me the money. That’s quantitative. In The Wall Street Journal, Jon Sindreu discusses the future of dividend investing, writing: This might seem to validate what the Federated Hermes portfolio manager and market historian Daniel Peris argues in his new book, “The Ownership Dividend.” He says that ultralow interest rates and the rise of high-growth digital companies … [Read more...]
You and I Have Had Some Good Conversations
In my conversations with you, we talk about some of the mutual funds you own that you oversee. One common refrain when we dig into the top holdings is the amount of overlap you have across your portfolio. Even with the different names and symbols, too many funds out there mimic each other. When times are good, it is no big deal. What you see in mutual funds is job protection. Because fund managers are under immense pressure to keep up with their benchmarks. When a fund manager misses the benchmark, upper management pays attention. There is nothing that grabs more attention than money going … [Read more...]
Retirees: The Black Swan Can Be So Cruel
Retired and soon-to-be-retired investors are in a tough spot. The idea of living off a fixed income is downright scary. Will the economy plunge into a recession? Will inflation continue to eat away at one’s purchasing power? You know how Your Survival Guy feels about predictions. If there’s one observation that’s true yesterday, today, and tomorrow, no matter how good the economy is or how attractive it might be, some investors always want more. They rub their hands together, wondering when their ship will come in, always feeling like we’re in a recession, and they leverage up to juice more … [Read more...]
Time to Get Your Lazy Money Working
When you look at my charts from yesterday, now is a good time to get your fixed-income house in order. After a certain point in an investor’s life, there’s a time to recognize that, “Self, I might not want to work forever. How am I going to make ends meet?” Believe Your Survival Guy when I say retirement is a most stressful time and is in the top ten of life’s emotional events. I know this firsthand because I talk with hundreds of investors about it. There comes a point where you can’t afford to risk your net worth to 100% stocks. Not that you ever do. But at some point, you might want … [Read more...]
What if Today’s Opinions Are Wrong?
I would be surprised if the average investor understands how major securities indices are composed. Take the S&P 500, for example. It’s a market cap weighted index. What’s a market cap, and how is it calculated? It’s surprising to me how little attention this gets. Market capitalization is the value of all the shares of a company added together. The market cap of the S&P 500 is the value of all the shares of all five hundred companies added together. The companies with the biggest market caps themselves, therefore, make up a bigger part of the index’s market cap. So, when you … [Read more...]
“Inflation Dodger”
You want a history lesson? In 1987, I was interviewed by The Kiplinger Magazine - Changing Times (which is known today as Kiplinger’s Personal Finance). This wasn’t long after I had written Financial Armadillo Strategy with the late David Franke. At the time, America was coming off some of its heaviest inflation ever, and investors wanted a solution to the problem. Despite those high rates of inflation in the 80s, I warned that even somewhat more moderate rates of inflation—like those Americans have seen over the last two years—do real harm to investors. “I don’t mean 10% or 15% inflation; … [Read more...]
Ad Copy: Your Survival Guy’s Mt. Rushmore of Investing Legends
For The American Conservative Magazine: If you were in shop class back in high school (remember that?) and you were instructed to build your own Mount Rushmore out of wood, I would have one piece of advice: leave room for expansion. Because when I think of my visit to the site back in the mid-80s as a kid, I remember the magnificence of the late presidents but also how more names were still being considered. Note to self: There will always be someone to add down the road. Which leads me to this: who would be on your "Investment Mt. Rushmore?" Take your time. This isn't a quiz, but allow … [Read more...]
Your Survival Guy’s Not a Psychologist, But…
Your Survival Guy’s not a psychologist, but I do know a thing or two about the emotions of investing. You hear plenty about not drawing more than a certain percentage of your money each year. You hear plenty about getting to a certain number where you’ll feel comfortable calling it quits from your job. You also hear about getting the right amount of sleep. Is it eight hours, or can some get by with less? It’s all pretty stressful. You all know that life’s bad events are stressful. But you also know that even life’s so-called “good” events can be hard (having just rounded the … [Read more...]
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