I’ll admit that I haven’t read many of the great works of literature.  Even though I read a great deal, almost all of my reading is related to the stock market. (Hopefully, there will be time to read more literature when I retire.) But sometimes, the two intersect in unexpected ways, and I find myself benefitting from the works of great authors.  I frequently find myself thinking about quotes that others consider to be important and symbolic of the work. One quote many personal finance writers like to share is from Ernest Hemingway’s classic “The Sun Also Rises.”  “How did… Read More

I’ll admit that I haven’t read many of the great works of literature.  Even though I read a great deal, almost all of my reading is related to the stock market. (Hopefully, there will be time to read more literature when I retire.) But sometimes, the two intersect in unexpected ways, and I find myself benefitting from the works of great authors.  I frequently find myself thinking about quotes that others consider to be important and symbolic of the work. One quote many personal finance writers like to share is from Ernest Hemingway’s classic “The Sun Also Rises.”  “How did you go bankrupt?” Bill asked.  “Two ways,” Mike said. “Gradually and then suddenly.”  #-ad_banner-#Now, I am certain there is a great deal of context I’m missing, and that’s a side effect of not reading the book. However, even without context, this quote is striking because it describes a process that applies to almost everything.  When we boil water on the stove, the temperature appears to change “gradually and then suddenly.” When a child is getting sick, their behavior seems to change “gradually and then suddenly.” When someone struggles at work, their performance often seems to change “gradually and then suddenly.” … Read More

Much to the delight of investors, the market rallied 14% in the first three months of the year. It was the best quarterly performance for the S&P 500 since 2009. Of course, not every stock in the market has performed accordingly, but many have done well, led by the technology sector (up 20.5% in the quarter). Some investors could be reluctant to buy stocks that rallied that much, especially when the market is nearing its recent highs. And some investors might be tempted to look for a lagging stock or two in search of value — and in search of… Read More

Much to the delight of investors, the market rallied 14% in the first three months of the year. It was the best quarterly performance for the S&P 500 since 2009. Of course, not every stock in the market has performed accordingly, but many have done well, led by the technology sector (up 20.5% in the quarter). Some investors could be reluctant to buy stocks that rallied that much, especially when the market is nearing its recent highs. And some investors might be tempted to look for a lagging stock or two in search of value — and in search of a winning performance going forward. If only investing were this simple… Experienced investors know that simply buying stocks that underperform the market does not, by itself, usually result in a winning performance.  —Recommended Link— This $1,003-a-Month Income Boost Is Available to Everyone There’s a way for you to collect extra government cash. And it isn’t some “file and suspend” Social Security trick that only makes sense for a few people. This obscure opportunity allows you to collect government cash no matter how old you are or how much money you already make. Read More

For centuries, humans relied on plant-derived medicines, using — based on countless experiments and astute observation — a wide range of chemically-active elements obtained from a wide variety of plants to treat many, if not most, ailments and diseases. A more systematic study of what it is that makes certain plants medically potent had only begun in the 19th century, however, thanks to the advances in chemistry and biology. Today, the entire field of ethnopharmacology — the study of the use of plant-based or other naturally derived medicines across different cultures — has emerged. So have the related fields of… Read More

For centuries, humans relied on plant-derived medicines, using — based on countless experiments and astute observation — a wide range of chemically-active elements obtained from a wide variety of plants to treat many, if not most, ailments and diseases. A more systematic study of what it is that makes certain plants medically potent had only begun in the 19th century, however, thanks to the advances in chemistry and biology. Today, the entire field of ethnopharmacology — the study of the use of plant-based or other naturally derived medicines across different cultures — has emerged. So have the related fields of ethnomedicine, medical anthropology — not to mention food science or good old-fashioned botany — and more. The potential of plants to deliver life-changing medication has long been one of the arguments for biodiversity. It should not come as a surprise that scientists, in research labs and in the biotech industry, have also been studying cannabis with a belief that, thanks to the chemicals in the plant, it’s much more than just a popular recreational drug. One such company is a pioneer in this research and the owner of the very first prescription medication derived directly from the cannabis plant. —Recommended… Read More

I have to admit that I had not expected the tenth anniversary of this bull market to have come and gone without much fanfare. Yes, there was a celebration — after all, the 10-year bull market is the longest since World War II, and the S&P 500 is up more than 300% — but it wasn’t as omnipresent as I had anticipated.  Instead, investors have been reveling in another, albeit related milestone — the market recovery from the fourth-quarter 2018 selloff in the strongest three-month performance since the third quarter of 2009.  This strength has helped the market to recover… Read More

I have to admit that I had not expected the tenth anniversary of this bull market to have come and gone without much fanfare. Yes, there was a celebration — after all, the 10-year bull market is the longest since World War II, and the S&P 500 is up more than 300% — but it wasn’t as omnipresent as I had anticipated.  Instead, investors have been reveling in another, albeit related milestone — the market recovery from the fourth-quarter 2018 selloff in the strongest three-month performance since the third quarter of 2009.  This strength has helped the market to recover much of the fourth-quarter losses and, as a result, post strong positive year-over-year returns.  One-Year Sector Performance (As of March 31) Source: S&P Global Market Intelligence Nearly every corner of the market has turned a strong performance over the past year. The market, as represented by the S&P 500, is up 7.3% year-over-year — helped, without a doubt, by the first-quarter rally. But even as every single market sector turned out a positive performance in the first quarter of 2019, some — such as energy, materials and financials — are still down compared with a year ago.  Let’s… Read More

In case any investor needed a reminder about the importance of value, we can look at Lyft’s initial public offering.  Last Friday, Lyft began trading to great fanfare. It opened significantly higher that day, delivering large gains to some of Wall Street’s biggest investors. That’s how IPOs often work.  #-ad_banner-#​How IPOs Work In an IPO, in general, we can say that the company sells shares to Wall Street. Specifically, early investors in the company and insiders are selling shares to large Wall Street firms. The sellers are doing so, at least in part, because they want to cash out. Read More

In case any investor needed a reminder about the importance of value, we can look at Lyft’s initial public offering.  Last Friday, Lyft began trading to great fanfare. It opened significantly higher that day, delivering large gains to some of Wall Street’s biggest investors. That’s how IPOs often work.  #-ad_banner-#​How IPOs Work In an IPO, in general, we can say that the company sells shares to Wall Street. Specifically, early investors in the company and insiders are selling shares to large Wall Street firms. The sellers are doing so, at least in part, because they want to cash out. This indicates the company is potentially overvalued.  Initial buyers of the stock receive their shares after the close the day before the stock begins trading. They are large customers of the firms handling the IPO. There are two reasons for that…  One is simply efficiency. It’s easier to allocate shares to buyers asking for hundreds of thousands of shares than to individuals asking for less than 100 shares.  The second reason is based on the fact that the share price is expected to rise when trading starts. Investors who got their shares the day before will enjoy an immediate gain. Read More

Loss aversion is a real thing. Whether it’s a game of Monopoly, a friendly bet, or a heated argument, people hate to lose. Entire businesses and industries are predicated not only on the excitement of winning but also on our innate desire to win back whatever we might just have lost. This isn’t just because humans are a competitive bunch. (Though many of us are.) It’s also because, psychologically, we perceive losses much more powerfully than gains. Psychologists know that, for most people, pain associated with losing something is about twice as powerful as the pleasure related to gaining the… Read More

Loss aversion is a real thing. Whether it’s a game of Monopoly, a friendly bet, or a heated argument, people hate to lose. Entire businesses and industries are predicated not only on the excitement of winning but also on our innate desire to win back whatever we might just have lost. This isn’t just because humans are a competitive bunch. (Though many of us are.) It’s also because, psychologically, we perceive losses much more powerfully than gains. Psychologists know that, for most people, pain associated with losing something is about twice as powerful as the pleasure related to gaining the same thing. As a famous quote from social science giants Amos Tversky and Daniel Kahneman goes, “Losses loom larger than gains.” Losing $100 feels worse than making $100 feels good. The concept of loss aversion, therefore, is particularly relevant to investing. The fear of losing can overwhelm our other logic-based thoughts when making a decision to sell a stock at a loss. Anything that hinders objectivity and logic shouldn’t be such a large component of our decision-making process — but, after all, we are human. That’s why I want to focus on minimizing the impact of this powerful loss-aversion factor. Read More

David Tran arrived in Los Angles from Vietnam in 1978 with no job and broken English. Yet, he was determined to achieve the “American Dream.” And he did just that… creating a brand that is now recognizable across the United States.  More impressively, Tran accomplished this without hiring a single salesperson or spending a cent on advertising. Even today, his company doesn’t have a Twitter (Nasdaq: TWTR) handle or Facebook (Nasdaq: FB) account.  —Recommended Link— The Most Underrated Wealth-Building Move in History Wall Street pretty much ignores it. but more than 150 years of data prove that doing this… Read More

David Tran arrived in Los Angles from Vietnam in 1978 with no job and broken English. Yet, he was determined to achieve the “American Dream.” And he did just that… creating a brand that is now recognizable across the United States.  More impressively, Tran accomplished this without hiring a single salesperson or spending a cent on advertising. Even today, his company doesn’t have a Twitter (Nasdaq: TWTR) handle or Facebook (Nasdaq: FB) account.  —Recommended Link— The Most Underrated Wealth-Building Move in History Wall Street pretty much ignores it. but more than 150 years of data prove that doing this beats every other investment approach hands down. By a LOT. An investor using this trick turned $10,000 into $1,568,157. But another one who didn’t ended up with just $161,054. And they both invested in the exact same stocks. You can get started with one mouse click. Take care of it here. It only takes a minute. You might not be familiar with Tran’s company, Huy Fong Foods, but you’ve probably come across his product in the red (or rather, clear) bottle with a green cap, sporting a rooster on the front. If you’re still at a loss, I’m referring to the… Read More