“No one values inflation protection because inflation has declined for 42 years.” – Barrons
There are a lot of things going on right now that seem normal, because they have been going on for so long, no one remembers otherwise. I’m not saying the market is going to crash imminently. I am saying that it seems like most people cannot remember the last time that happened, that didn’t turn into a BTFD moment three days later. And if the market does correct for more than three days, you will see fewer articles advising investors to be 100% in stocks. Somebody smart once said, “But as long as the music is playing, you’ve got to get up and dance. We’re still dancing.” (https://www.fool.com/investing/general/2009/11/25/the-10-dumbest-banker-quotes-of-all-time.aspx) Oh wait, no one thinks that was a smart thing to say anymore. At some point in the future, the risk will be an important part of risk adjusted returns again.
I added two more books to the list this month, but GoodReads is informing me that I am four books behind schedule of reaching my goal of 30 for the year. However, GoodReads has never seen me binge read Carl Hiaasen.
Lots of articles again this month. Maybe not a good thing. The news is not so positive these days, so probably should spend a bit less time there.
Here are my most influential reads – in no particular order:
- Get Ready for a Shift Away From U.S. Stocks – “We’ve already had 12% dollar depreciation since last April. And investors are way too exposed to the U.S. Our valuations versus every other asset class on Earth, with the exception of North Asia, are incredibly extreme, and the dollar’s overvalued.”
- How To Be Successful – “In a world where almost no one takes a truly long-term view, the market richly rewards those who do.”
- Advice to Grads: Be Warriors, Not Wokesters – “Be a highly skilled, devastatingly strong warrior who exerts their power by example and leaves their weapon in its sheath. Forgiveness is strength. Demonstrate it, every day. Be a warrior, not a wokester.”
- Give Your Brain Some Breathing Room – “I suggest the following compromise: check in on the news for 45 minutes, once a day, preferably in the morning.”
- The Most Important Number in Personal Finance – “The reason I prefer the LWR to something like income or net worth is that it controls for both the stock and the flows in your personal finances. Your net worth is a stock (i.e. a snapshot of your accumulated wealth) while your income is a flow (i.e. a measure of how your wealth is changing through time). They are both great, but limited. ” Stephen here: This was an informative exercise.
- Howard Marks on economic growth in a ‘low return world’ – “We’re in an asset bubble. It’s everything. It’s not particular to high-yield bonds, or to bonds, or stocks. It’s real estate, it’s private equity, it’s everything. “
- Is valuing SaaS stocks a special form of the Petersburg Paradox? – “But the point is for individual stocks, there can be handful of stocks that can be valued at multiples so high that defies any logic, and still be able to beat the benchmark. The Petersburg Paradox is perhaps indeed the perfect description for such companies.” Stephen here: But my guess is that most of the companies are not the companies that defy the logic. Amazon twenty years ago. Yes. Every SaaS business out there today. No.
- Companies and Families Are Loading Up on Debt. It Could Be a Dangerous Trend – “What’s also surprising is that the BNPL model goes against perceptions that consumers are flush with savings, fostered by uninterrupted income for those who continued working during the pandemic and government stimulus payments to those not so fortunate, combined with the spending constraints during lockdowns.” Stephen here: There. Is. So. Much. Money. Every. Where.
- An Oral History of Adam Sandler, Pickup Basketball Legend – “Literally, it looked like he had them clothes since the 1990s, like literally the 1990s. “
- Wildfires prompt air quality alerts across the West – “If people have whole-home air-conditioning, installing high-efficiency filters and running the system can filter smoke that’s gotten inside.”
Note: This is based on when I read the article, not necessarily when it was first published. Unfortunately, my backlog of things I would like to read always seems to dwarf the amount of time I can devote to reading.
Top clicks across the site:
- Financial Model vs. Operating Model
- EBITDA Is Not A Good Proxy For Cash Flow
- Family Mission: Solamere Loop Trail
- Excel Template: Football Field Chart
- Operating Model Tips
Updated stats through August: