Influential Reads – September 2023

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“One of the most important parts of developing an identity that can thrive, persist, and endure change is to diversify your sense of self. You can think of identity like a house. You want the house to have multiple rooms. Perhaps there is a “parent” room; an “athlete” room; an “employee,” “entrepreneur,” or “executive” room; a “community member” room, and so on. It’s okay to spend a lot of time in just one room, but you’ve got to ensure you keep the others in good enough shape. This way, when you experience a massive change or disorder event in one area of your life, in one room of your identity, you can step into other areas to gain your footing and stability. Like a diversified portfolio in investing, diversifying your sense of self makes you more rugged and flexible in the face of change.” — Brad Stulberg in Master of Change

Welcome to Q4! September was a month, for reasons that I won’t go into.  I guess I should have just T-Billed and Chilled.

Actually, I’ve been doing that for quite some time.  See this post.  All the recent publicity around that makes me a touch nervous.  I have gotten so used to being wrong, that apparently being within the consensus makes me uncomfortable.

There’s probably some sort of lesson in there somewhere.  One day, I might figure it out.

Here are my most influential reads for the month – in no particular order:

  1. Of boiling frogs and underperforming investments – “There are so many areas in life where we know we can reduce losses and avoid harm by taking preventive action, yet we wait and wait until it is too late.”
  2. New 20+ year record high mortgage rates begin to impact home sales; bifurcation in new vs. existing home prices continues – “As per usual, interest rates lead sales…Further, sales lead prices.”
  3. Should You T-Bill and Chill? – “You have a significant amount of reinvestment risk.”
  4. Why TIPS Look Attractive – “Given recent events, as well as the ever-rising level of national debt, it seems prudent to treat future inflation prospects from a neutral perspective rather than being distinctly optimistic.”
  5. Ray Dalio All Weather Portfolio Review, ETFs, & Leverage – “Utilities provided the lowest volatility, smallest drawdown, highest return, and highest risk-adjusted return:”
  6. Fewer Losers, or More Winners? – “Neither maximizing winners nor minimizing losers is necessarily enough. It’s all in the balance. “
  7. The Bond Bear Market & Asset Allocation – “The bond returns have been higher most of the time but it’s not a huge difference.”
  8. Asset Class Correlations Convict Central Bank Activism – “While central bank largesse may undergird returns (at least most of the time), it does so while increasing portfolio risk by increasing asset class correlations. There is no free lunch, indeed, even when it looks like there is.”
  9. Our future is Japan – ” In Japan, the central bank has been manipulating the bond market through its interest rate targeting policy for years. This has kept long-term bond yields close to zero and helped the government sustain debt levels well in excess of 200% of GDP.”
  10. Have Bonds Finally Reached Escape Velocity? – “In short, bonds with a duration under 5 have likely already reached escape velocity. T-notes in the 5-10 year duration range are close to escape velocity, but not quite there yet. And long bonds are still far from escape velocity. “

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.

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Reminder: I learned way back in 2000 not to give investment advice, especially to people I know well.  So please do not take anything in any of these posts as financial or investment advice.