As I write this, we are in the midst of a global pandemic, brought about by a novel virus with no existing vaccine or treatment. This virus sickens virtually everyone who comes into contact with it. It does not care about race, religion, gender, sexual orientation, financial class, political affiliation, or nationality. It is not a hoax. All of this has led to an economic meltdown of historic proportions, as worldwide people are asked to abide the directives of governments that cannot be trusted to provide proper information or materials.
Also as I write this, we are in the midst of a domestic crisis, brought about by a narcissistic virus with no existing vaccine or treatment. This virus sickens virtually everyone who comes into contact with it. It only cares if you are white, Christian, male, straight, upper class, Republican, and American. It is a total hoax. All of this has led to a political meltdown of historic proportions, as American citizens are asked to abide the directives of a government that cannot be trusted to provide proper information or materials.
The virus I refer to in the first paragraph is COVID-19. The virus I refer to in the second paragraph is Donald Trump.
Let's hope one of these viruses overcomes the other as soon as possible.
Friday, March 20, 2020
Saturday, February 29, 2020
Opposite Day(s)
The coronavirus is spreading across the continents. The stock market and interest rates are tanking. This is a good time for some perspective (on the markets, not on the virus).....
When stocks decline sharply, the steady flow of negative news reports drives many people to flee the markets out of fear -- and miss out on potential gains as financial markets inevitably regain their strength over the next few months and years.
Right now, we're actually going through the third(!) stock market drop of 10% or more in the past 13 months. The other times, as well as all of the other times before that, the markets recovered and went on to new highs. Yet people are still fearful.
So how do you keep the fear from prevailing?
Simple. Long-term investors should do the opposite of what they want to do. That is, instead of watching the markets and reacting, they should ignore the markets and do nothing.
It's OK to not check your investment / 401k / 403b account balance when the market is falling. It’s also OK to not watch or listen to financial news. In fact, turning off the financial news is the smartest anyone can do if it keeps them from making mistakes based on emotional decisions.
The real contrarians will actually do something -- they'll buy into the falling markets, and of course, sell into the gaining ones. They're the smart ones.
Be smart. Be brave. Be opposite.
When stocks decline sharply, the steady flow of negative news reports drives many people to flee the markets out of fear -- and miss out on potential gains as financial markets inevitably regain their strength over the next few months and years.
Right now, we're actually going through the third(!) stock market drop of 10% or more in the past 13 months. The other times, as well as all of the other times before that, the markets recovered and went on to new highs. Yet people are still fearful.
So how do you keep the fear from prevailing?
Simple. Long-term investors should do the opposite of what they want to do. That is, instead of watching the markets and reacting, they should ignore the markets and do nothing.
It's OK to not check your investment / 401k / 403b account balance when the market is falling. It’s also OK to not watch or listen to financial news. In fact, turning off the financial news is the smartest anyone can do if it keeps them from making mistakes based on emotional decisions.
The real contrarians will actually do something -- they'll buy into the falling markets, and of course, sell into the gaining ones. They're the smart ones.
Be smart. Be brave. Be opposite.
Thursday, February 13, 2020
Caucus Of Death
Disaster. Debacle. Embarrassment. Fiasco.
You may think I'm talking about the current presidential administration. While those words definitely all fit that, I'm actually referring to another political item: The 2020 Iowa Caucuses.
This isn't going to be a review of what went wrong. [Technology.] Nor will it be a prediction about the future of Iowa's first-in-the-nation presidential election year event. [Terminal.] It's to clarify something the national media doesn't cover:
Most Iowans do not give a damn about preserving their first-in-the-nation caucus status.
The only folks who really ever cared were / are mainly political activists and wonks, who constitute a very small percentage of the population. I'll also throw in the hotel and restaurant industry and a few other small main street businesses, which enjoyed higher sales from all of the extra people roaming the state off and on for months.
Yay for the economic growth of a few, on a quadrennial basis.
So for anyone who thinks Iowans will be universally sad to see the caucuses abandoned, no worries! We're actually looking forward to having fewer political commercials bombard us on both traditional and digital media platforms. We're looking forward to having more elbow room at the Iowa State Fair. We're looking forward to the calm.
The Iowa caucuses have always been a slightly goofy anachronism in the privacy-challenged digital age. It may well be time for them to die.
In which case, not that many Iowans will be crying at the funeral.
You may think I'm talking about the current presidential administration. While those words definitely all fit that, I'm actually referring to another political item: The 2020 Iowa Caucuses.
This isn't going to be a review of what went wrong. [Technology.] Nor will it be a prediction about the future of Iowa's first-in-the-nation presidential election year event. [Terminal.] It's to clarify something the national media doesn't cover:
Most Iowans do not give a damn about preserving their first-in-the-nation caucus status.
The only folks who really ever cared were / are mainly political activists and wonks, who constitute a very small percentage of the population. I'll also throw in the hotel and restaurant industry and a few other small main street businesses, which enjoyed higher sales from all of the extra people roaming the state off and on for months.
Yay for the economic growth of a few, on a quadrennial basis.
So for anyone who thinks Iowans will be universally sad to see the caucuses abandoned, no worries! We're actually looking forward to having fewer political commercials bombard us on both traditional and digital media platforms. We're looking forward to having more elbow room at the Iowa State Fair. We're looking forward to the calm.
The Iowa caucuses have always been a slightly goofy anachronism in the privacy-challenged digital age. It may well be time for them to die.
In which case, not that many Iowans will be crying at the funeral.
Wednesday, January 29, 2020
A Candidate Guide, Circa 2020
Next week, Iowa hosts its semi-famous political caucuses. The attention this year is even more overwhelming than usual, thanks to a toxic political climate and social media.
It's time for my quadrennial assessment of the remaining candidates who are spending time in Iowa, this year limited to the Democratic Party since the Republican party is set on nominating the current ignorant, corrupt, and impeachable president. In alphabetical order:
Joe Biden -- The safest, most moderate pick for the Dems. A known commodity with the best chance of winning the electoral votes in the states that matter most. He would be an more formidable candidate if he was several years younger.
Pete Buttigieg -- His moderate temperament and views, along with his military service, make him interesting. A lack of political baggage is also a plus, but a lack of experience is a negative. It's very surprising that he's made it this far.
Amy Klobuchar -- Another moderate whose views are reasonable and nationally appealing, and she has a neighboring state, midwestern likability to her. However, that likability doesn't translate into passionate support for her candidacy.
Bernie Sanders -- He's been in this race before, so he knows the issues, has refined his message, and has the name recognition. Has popularity with younger voters given his populist message, but that probably hurts more than helps in a national election.
Tom Steyer -- The 'attack Trump' strategy has appeal with some, but everyone knows he's just in it for issue advocacy and name recognition, right?
Elizabeth Warren -- The most intellectually appealing candidate, with a detailed plan for almost everything. Her energy and experience also help, but she limits her chances by being too far left on a few issues, namely college debt and health care.
Andrew Yang -- Doesn't seem there's any chance he'd win with no experience, but everyone should listen to what he's saying about the future of the U.S. workforce and economy.
Not mentioned is Mike Bloomberg, who isn't campaigning in Iowa but who could have an impact on the actual nominee, assuming it isn't him.
It's time for my quadrennial assessment of the remaining candidates who are spending time in Iowa, this year limited to the Democratic Party since the Republican party is set on nominating the current ignorant, corrupt, and impeachable president. In alphabetical order:
Joe Biden -- The safest, most moderate pick for the Dems. A known commodity with the best chance of winning the electoral votes in the states that matter most. He would be an more formidable candidate if he was several years younger.
Pete Buttigieg -- His moderate temperament and views, along with his military service, make him interesting. A lack of political baggage is also a plus, but a lack of experience is a negative. It's very surprising that he's made it this far.
Amy Klobuchar -- Another moderate whose views are reasonable and nationally appealing, and she has a neighboring state, midwestern likability to her. However, that likability doesn't translate into passionate support for her candidacy.
Bernie Sanders -- He's been in this race before, so he knows the issues, has refined his message, and has the name recognition. Has popularity with younger voters given his populist message, but that probably hurts more than helps in a national election.
Tom Steyer -- The 'attack Trump' strategy has appeal with some, but everyone knows he's just in it for issue advocacy and name recognition, right?
Elizabeth Warren -- The most intellectually appealing candidate, with a detailed plan for almost everything. Her energy and experience also help, but she limits her chances by being too far left on a few issues, namely college debt and health care.
Andrew Yang -- Doesn't seem there's any chance he'd win with no experience, but everyone should listen to what he's saying about the future of the U.S. workforce and economy.
Not mentioned is Mike Bloomberg, who isn't campaigning in Iowa but who could have an impact on the actual nominee, assuming it isn't him.
Monday, January 13, 2020
Less Brutal Vikings, A Short List
Two years ago I wrote about a rare thrilling playoff victory by the Minnesota Vikings. This is a favorite professional team of mine for which I’ve documented many brutal losses over the years, but as I said then, I’d never bothered to come up with a list of big wins.
The Vikings just had another exciting playoff victory a week ago, so I decided it was time to come up with my list of the five greatest Vikings wins in history. Let’s just say it wasn’t easy, because in the last 40 years, there aren’t that many.
1) 2018 NFC Divisional playoff game at home versus the New Orleans Saints. This game is now known as the Minneapolis Miracle.
2) 2020 NFC Wild Card playoff game in OT at New Orleans Saints. I know, the Saints again two years later. An exciting, unexpected win, but it’s still small consolation for losing the 2010 NFC Championship game there in OT.
3) 1980 regular season game at home versus the Cleveland Browns. The Vikings won on a two-play, 80-yard drive with a hitch-and-pitch, then a long Hail Mary TD pass to Ahmad Rashad on the last play of the game, clinching the division and a playoff spot.
4) 2004 Wild Card playoff game at the Green Bay Packers. Memorable for beating their arch-rival in a road playoff game, but even more memorable when receiver Randy Moss caught a game-clinching TD pass, and then faked mooned the fans.
5) 1976 NFC Championship game at home versus the Los Angeles Rams. As of now, it's the the last time the Vikings won a game to advance to the Super Bowl. It was a great team, with great kick-blocking special teams, but one that would lose the Super Bowl to the Oakland Raiders 32-14. And they haven’t been back since.
The Vikings just had another exciting playoff victory a week ago, so I decided it was time to come up with my list of the five greatest Vikings wins in history. Let’s just say it wasn’t easy, because in the last 40 years, there aren’t that many.
1) 2018 NFC Divisional playoff game at home versus the New Orleans Saints. This game is now known as the Minneapolis Miracle.
2) 2020 NFC Wild Card playoff game in OT at New Orleans Saints. I know, the Saints again two years later. An exciting, unexpected win, but it’s still small consolation for losing the 2010 NFC Championship game there in OT.
3) 1980 regular season game at home versus the Cleveland Browns. The Vikings won on a two-play, 80-yard drive with a hitch-and-pitch, then a long Hail Mary TD pass to Ahmad Rashad on the last play of the game, clinching the division and a playoff spot.
4) 2004 Wild Card playoff game at the Green Bay Packers. Memorable for beating their arch-rival in a road playoff game, but even more memorable when receiver Randy Moss caught a game-clinching TD pass, and then faked mooned the fans.
5) 1976 NFC Championship game at home versus the Los Angeles Rams. As of now, it's the the last time the Vikings won a game to advance to the Super Bowl. It was a great team, with great kick-blocking special teams, but one that would lose the Super Bowl to the Oakland Raiders 32-14. And they haven’t been back since.
Monday, December 30, 2019
2020
Another year is ending, this one also concluding a decade. It would be a good time for a retrospective piece on the past ten years, but lots of other entities are doing that. I'll just stick to my usual review of the things I wanted to have happen this year, and consider some things I would like to see happen in 2020. We'll again start with the prior year's list, with comments in ALL CAPS:
The resignation or impeachment of a mentally unstable and unqualified president -- again, no names.
IMPEACHMENT HAPPENED. I CARRIED THIS OVER FORM THE PRIOR YEAR, WHICH TURNED OUR TO BE VERY PRESCIENT.
The electric vehicle becoming America's fastest growing (by percentage) seller.
THIS IS HAPPENING IN THE U.K. BUT NOT IN THE U.S.
Alabama and Clemson and New England to have poor football seasons.
THEY WEREN'T POOR, BUT ALABAMA AND NEW ENGLAND AT LEAST HAD DOWN YEARS.
Some major medical breakthrough, perhaps a vaccine to eliminate a dread disease.
NO.
Consistent, moderate summer rain in central Iowa.
YES.
A priest actually arrested and charged and jailed for past sexual abuse.
THIS DID HAPPEN IN PENNSYLVANIA. IT WAS TOO PREDICTABLE, AND NOT NEARLY ENOUGH.
More cities allowing app-based scooter rentals.
WHILE MORE CITIES DID ADOPT THEM, OTHER CITIES STARTED TO RESTRICT THEM.
Another scandal that ruins another Fox (News) TV personality.
NOT REALLY, ALTHOUGH THE PRIOR SCANDALS AND CURRENT PROPAGANDA AT FOX DID CAUSE SHEP SMITH TO LEAVE.
U.S. restaurants that allow payment by app, OR that bring the credit card reader to your table.THIS STILL HASN'T RECEIVED WIDESPREAD U.S. ADOPTION, WHICH IS SORT OF INFURIATING.
Me traveling to one of the five continental states in which I've never set foot.I WAS ABLE TO CROSS OFF NORTH CAROLINA AND SOUTH CAROLINA FROM MY LIST. DOWN TO IDAHO, MICHIGAN, MONTANA, AND NORTH DAKOTA. (IT WAS ACTUALLY SIX.).
Now, for 2020 I'd like to see these things happen:
Me traveling to the final four U.S. states in which I've never set foot.
A new president-elect and a corresponding surviving, independent, democratic republic.
More chances to make a hole-in-one (which means more time to play golf).
Widespread acceptance of plant-based meats on restaurant menus.
The Minnesota Twins to break their streak of 16 consecutive playoff game losses.
Consolidation in the video streaming service industry.
A Summer Olympics without scandal.
Greater federal regulation of Facebook, and less people using it to show me pictures of their food.
A new artist who brings back the sound of classic rock.
That I never order from a bar that tells me it has no Crown Royal Apple.
The resignation or impeachment of a mentally unstable and unqualified president -- again, no names.
IMPEACHMENT HAPPENED. I CARRIED THIS OVER FORM THE PRIOR YEAR, WHICH TURNED OUR TO BE VERY PRESCIENT.
The electric vehicle becoming America's fastest growing (by percentage) seller.
THIS IS HAPPENING IN THE U.K. BUT NOT IN THE U.S.
Alabama and Clemson and New England to have poor football seasons.
THEY WEREN'T POOR, BUT ALABAMA AND NEW ENGLAND AT LEAST HAD DOWN YEARS.
Some major medical breakthrough, perhaps a vaccine to eliminate a dread disease.
NO.
Consistent, moderate summer rain in central Iowa.
YES.
A priest actually arrested and charged and jailed for past sexual abuse.
THIS DID HAPPEN IN PENNSYLVANIA. IT WAS TOO PREDICTABLE, AND NOT NEARLY ENOUGH.
More cities allowing app-based scooter rentals.
WHILE MORE CITIES DID ADOPT THEM, OTHER CITIES STARTED TO RESTRICT THEM.
Another scandal that ruins another Fox (News) TV personality.
NOT REALLY, ALTHOUGH THE PRIOR SCANDALS AND CURRENT PROPAGANDA AT FOX DID CAUSE SHEP SMITH TO LEAVE.
U.S. restaurants that allow payment by app, OR that bring the credit card reader to your table.THIS STILL HASN'T RECEIVED WIDESPREAD U.S. ADOPTION, WHICH IS SORT OF INFURIATING.
Me traveling to one of the five continental states in which I've never set foot.I WAS ABLE TO CROSS OFF NORTH CAROLINA AND SOUTH CAROLINA FROM MY LIST. DOWN TO IDAHO, MICHIGAN, MONTANA, AND NORTH DAKOTA. (IT WAS ACTUALLY SIX.).
Now, for 2020 I'd like to see these things happen:
Me traveling to the final four U.S. states in which I've never set foot.
A new president-elect and a corresponding surviving, independent, democratic republic.
More chances to make a hole-in-one (which means more time to play golf).
Widespread acceptance of plant-based meats on restaurant menus.
The Minnesota Twins to break their streak of 16 consecutive playoff game losses.
Consolidation in the video streaming service industry.
A Summer Olympics without scandal.
Greater federal regulation of Facebook, and less people using it to show me pictures of their food.
A new artist who brings back the sound of classic rock.
That I never order from a bar that tells me it has no Crown Royal Apple.
Thursday, December 12, 2019
Correlation Is Not Causation
A few years have passed since I’ve blogged about investing. I used to post more about it when I worked at a firm where I put myself in charge of writing a quarterly investment newsletter of sorts; then I’d basically copy and paste what I’d already written.
One of the themes of that prior investment writing I did was how there was little, if any, correlation between how the markets perform over long periods and virtually any other specific individual thing. Investing history and statistics prove that if X happens, it does not impact the future of Y.
The best current example of this investing correlation mistake is people who want to correlate the political parties with stock market performance. The fact is, there has never been a correlation between those two things. [Note to those Republicans who still believe those things are related, you actually want a Democrat in office, because the stock market went up more during three democratic presidential terms than for any republican presidency.]
Another very broad example of this investing correlation fallacy involves technical trading, which is buying or selling based on nothing more than the grid lines on a chart. For some, these simple securities price charts signal a breakout up or down, ergo an investing opportunity. It's amazing how many otherwise smart people believe in this type of technical 'strategy' when it has nothing to do with the underlying company. It's stupid.
This all makes me think, what other things do people want to positively or negatively correlate that have no real correlation? There are so many, but here are a few that annoy me:
* Scholastic grades and intelligence.
* Hours spent at the office and work.
* Owning a Fitbit (or other electronic health tracking device) and weight loss.
One of the themes of that prior investment writing I did was how there was little, if any, correlation between how the markets perform over long periods and virtually any other specific individual thing. Investing history and statistics prove that if X happens, it does not impact the future of Y.
The best current example of this investing correlation mistake is people who want to correlate the political parties with stock market performance. The fact is, there has never been a correlation between those two things. [Note to those Republicans who still believe those things are related, you actually want a Democrat in office, because the stock market went up more during three democratic presidential terms than for any republican presidency.]
Another very broad example of this investing correlation fallacy involves technical trading, which is buying or selling based on nothing more than the grid lines on a chart. For some, these simple securities price charts signal a breakout up or down, ergo an investing opportunity. It's amazing how many otherwise smart people believe in this type of technical 'strategy' when it has nothing to do with the underlying company. It's stupid.
This all makes me think, what other things do people want to positively or negatively correlate that have no real correlation? There are so many, but here are a few that annoy me:
* Scholastic grades and intelligence.
* Hours spent at the office and work.
* Owning a Fitbit (or other electronic health tracking device) and weight loss.
Subscribe to:
Posts (Atom)