Week In Review Articles
Morning thoughts as I jog to the gym:
The ability to do something for a long time might be the most profound competitive business advantage simply because of compound interest.
It’s not about home runs. It’s about the singles and doubles. It’s about longevity.
— Samuel S. Deane, MBA (@samuelsdeane) August 5, 2019
Your Brain On Stocks: Well, Technically “One of the first behavioral economics ideas I understood was the concept of mental accounting. Mental accounting flies in the face of fungibility. It asserts that, despite money being interchangeable, we classify our personal funds differently instead of treating each dollar as equal”
The Reformed Broker: When Everything That Counts Can’t Be Counted “Customers are now being referred to as users, and, as such, commanding more respect (and capital) from the investor class as a result of doing so. Customers is an unsexy term, with the connotation that they must continually be sold to and “reacquired.” Users, on the other hand, mustn’t be reacquired because they are always there. I get a customer, I keep a user.”
Ashby Daniels: There Are No Facts About The Future “We just don’t know in advance how any policy will pan out in the long run. And I think it’s important to remember that these companies are going to position themselves in the best way possible given their respective resources. Any political pandering and election outcomes should not be a cause to run for the exits no matter which party is at the helm at any given moment”
The Reformed Broker: Why The Stock Market Must Go Down “The only reason stocks can go up is because they can also go down. It is this risk that keeps investors in check and that keeps people from paying an infinite amount of money for shares in a business. The reintroduction of risk, in the context of this summer’s sell-off, is the best thing that could have possibly happened.”
A Teachable Moment: Don’t Let China’s Devaluation Devaluate Your Portfolio “During these moments, Charlatans emerge from their caves making scary predictions and dangerous statements. Your long term financial health is the last thing they care about. Their motivation is purely selfish in nature. Attracting eyeballs with ever-increasing outlandish proclamations is their game plan. Enriching themselves is their top priority.”
The Belle Curve: Worrying About The Wrong Risk ” But inflation is not as tangible a risk as market declines. Like a frog in lukewarm water over a boiler, we cannot detect it as easily as we can dips in the stock market. Our brains are hardwired to identify immediate risks, not long-term ones.”
Abnormal Returns: Aim To Buy More Time, Not More Stuff “Does money matter? Of course, but controlling your time and environment may matter even more.”
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