How do you lose most of your wealth in the dot com bust and then rise from the ashes to become one of the 100 richest people in the world? Good question. Meet Masayoshi Son, the 59-year-old head of Softbank, an investment company that raised $100 billion last year alone for its Vision Fund. In watching Mr. Son interviewed by Carlyle group co-founder David Rubenstein, it’s hard not to like the man. Here’s a guy who at age 16 hounded McDonald’s founder Ray Kroc’s office with phone calls asking for just a few minutes of his time simply because he wanted to see him in person. When … [Read more...]
20-Year Review: Stock Market Cuts Investors’ Wealth Roughly in Half—Twice
“Monday’s madness is a reminder that investing in stocks doesn’t automatically make people rich. Twice in the past 20 years—between 2000 and 2002, and again between 2007 and 2009—the stock market has cut investors’ wealth roughly in half,” writes Jason Zweig at the WSJ. When you think about the mathematics of investment losses (see chart below), you quickly realize how difficult it becomes to get back to square one, especially for retirees. And when you think about it in terms of real dollars—seeing $1 million decline to $500,000—imagine how many hours you have to work to make that kind … [Read more...]
Dow Down 1600 Points, Websites Crash, and Vanguard GNMA
When stocks were down 1,600 points yesterday, “The websites of two of the country’s biggest robo-advisers—Wealthfront Inc. and Betterment LLC—crashed,” reports Bloomberg. I’ve never been comfortable with the idea of robo-advisers. What if the technology ends up not working? Will the so called robos have the skill and patience that I know I have? Who knows? The same is true with stop losses. I will never trust my hard earned money with program trading. I’ve never been comfortable with the idea, especially when it comes to stop losses. With stop losses sell orders are placed when a … [Read more...]
Dow Loses 665 Points
The Dow Jones Industrial Average plunged over 665 points today. That equates to a loss of 2.54%. Today’s sell-off ends the longest streak on record without a three percent correction. The drop was sharp, and broad-based. Every sector in the S&P 500 was down today, with about 95% of stocks in the index falling. Energy and tech took the biggest hits. Market pundits attributed the losses to rising bond yields, which were up again today as employment and wage gains exceeded expectations. So, what was good for the economy was apparently not good for the stock market. The TINA market … [Read more...]
Quality Always Rises to the Top
Back in November of 1990 many investors were nervous about their portfolios. Iraq had invaded Kuwait and war seemed inevitable. That month, the UN Security Council passed Resolution 678. The resolution gave UN members the go-ahead to use force to remove Iraq’s military from Kuwait if it remained there after January 15, 1991. It seemed only a matter of time before a big war would break out. Aerial bombardment of Iraqi positions began January 16. Despite the fear that pervaded markets, I was very confident then in my investment portfolio, as I am today. I had built a portfolio conditioned to … [Read more...]
Could You Ever Make it Back in Bitcoin?
Bitcoin has lost half its value since mid-December. The arithmetic of losses continues to tighten its grip on the late arrivals. Originally posted on Yoursurvivalguy.com. … [Read more...]
Your First Step Toward Investment Success
For over four decades, I have offered strategies and insights to help individual investors like you. My primary goal, whether in my monthly strategy reports, at investment seminars, or for current clients of my money management firm, has been helping investors achieve long-term investment success. What you buy, what you sell, what price you pay, and which strategies you pursue all matter for your investment success, but they aren’t the most important steps in the process. Focusing first on what the “good buys” are is putting the horse before the cart. What’s your goal? First define what … [Read more...]
It’s Only ‘Safety First’ That Will Make You Money: Part I
Originally posted February 28, 2017 on Yoursurvivalguy.com. Billionaire investor Warren Buffett, on the heels of releasing his annual report, said, Monday, that the stock market isn’t in a bubble and “measured against interest rates, stocks actually are on the cheap side compared to historic valuations.” In the same interview, he also warned “That doesn’t mean the stock market can’t go down 20% tomorrow.” A buying opportunity he’d welcome with open arms. It’s good to be Warren. It’s funny how life works because, coincidentally, later that day I was speaking with clients who live in the … [Read more...]
Investors Don’t Care About a Concert in the Park: Profits are the Goal of Business
When investment managers get too cute with your money, guess who pays the price? The answer is you, obviously. Andy Kessler has written an epic takedown of the "Socially Responsible Investing" movement over at The Wall Street Journal. Here's a bit of it: Profits are the best measure of a business’s value to consumers—and to society. No one holds a gun to the customer’s head. If the buyer weren’t glad to pay the free-market price, he would make the product or perform the service himself. Yet this idea is questioned all the time. A case in point is Amazon, currently worth $625 billion based … [Read more...]
Even Nolan Ryan Had a Hard Time Transitioning to Retirement
He had been planning his retirement for years. Hall of Fame pitcher Nolan Ryan wanted to be a cowboy after hanging up his baseball uniform. But he found the transition to retirement a lot harder than he thought it would be. It wasn't the long rides or the tough work of being a rancher that were hard on Ryan, it was the loss of his past life that gave him trouble. He missed going into the ball club and being part of a team every day. In my experience with clients transitioning from work to retirement, Ryan is not unique. Many people entering retirement are greeted by mixed emotions, even … [Read more...]
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