This was a week spent out of the office, away from the 9-5, but still plenty busy. I was at the coffee shop most days reading, writing, grading, and meeting with great people. I got to spend a little more time with the kids and even snuck in a nap or two. All in all, it was just what was needed, in terms of catching up on housework, extra-curriculars and family time. However, especially after some great conversations, I am more than ready to get back to work. I’m looking forward to what the future brings.
Here are the links I found interesting this week. Let me know if there is anything I missed
To start, I liked this short click-baitey Business Insider (@businessinsider) on how investing billionaires make decisions. – I Tried the 10-10-10 Method Inspired by Warren Buffett and Ray Dalio
With all the speculation of tax reform and a couple of Trump tweets, 401k plans are a hot discussion topic right now. A couple of my regular reads picked up the story and offered some good takes.
The first one is Anthony Isola (@ATeachMoment), from the blog A Teachable Moment, where he portrays a dire and worsening situation for the poor and lower middle class. Unfortunately, for people in this category, life is too tough right now to worry about locking money up to retire sometime in the next 40 years. Therefore, saving rates are abysmal in those categories. – The Dirty Secrets of 401k Plans
The next link is Justin Castelli (@jus10castelli) of the All About Your Benjamins blog. He offers more stats and the latest from Washington. – Game On For Your 401k
What all these stats say to me is that Americans need to do a better job saving. The government could certainly do a lot to encourage or nudge, this behavior but you can’t expect material action to help reverse the situation. Last year, John Oliver did a take-down of the 401k business and railed providers about hidden fees and non-disclosures, but by far the biggest culprit is our own inability to save. Here were my thoughts about it then – What is Really Killing Your Retirement?
Continuing on with the retirement savings theme, but going even deeper, is a post from the aforementioned Ray Dalio (@raydalio). He’s the founder of the world’s largest hedge fund, Bridgewater, and now, with the release of his famed management and life philosophy in book form (Principles), a best-selling author. Not only are the bottom 60% of Americans (based on income) not seeing the benefits of a growing economy, in fact, life for non-college educated white Americans is getting tougher. – Our Biggest Economic, Social, and Political Issue The Two Economies: The Top 40% and the Bottom 60%
There are some startling statistics in this post, that I first saw this spring when John Mauldin (@JohnFMauldin) released his Angst in America series of posts. If you look at these numbers it can help explain some of the divide, the anger, and our current political situation.
Moving on, this post on Bitcoin was a lesson for me in drawing conclusions before reading. In what is a smart analysis of how volatility can impact a portfolio, I saw the headline and read the article with my crypto-BS shields all the way up and responded right away with, “this is ridiculous! How can you even try to plot Bitcoin on an efficiency frontier!?” In my haste, I missed the fact that it was a good thought experiment and not meant as a practical application. Thankfully, the author, Nick Maggiulli (@dollarsanddata) set me straight pretty quick – Is Bitcoin in the Optimal Portfolio?
Ben Carlson (@awealthofcs), from the esteemed Ritholtz posse, with a good article in Bloomberg on momentum based investing – Momentum Investing Has a Place in Portfolios
Finally, cheers to Adam Grant (@AdamMGrant) for posting a link to this podcast. It’s called On Being (@onbeing) with Krista Tippett (@kristatippett) and this particular episode is a great interview with famed psychologist Daniel Kahneman. – Why Contradict Ourselves and Confound Each Other
That’s all for this week. Remember to be good to each other!