Category: Personal Finance

Be Flexible, The World Is Changing


Sometimes we cannot understand the implications of things that are happening around us. We have too little information, we have no rules to govern the new situation, or we are not perceptive enough. Probably all three. In the late 1880’s Hiram Stevens Maxim invented… Continue Reading “Be Flexible, The World Is Changing”

Where Do Mutual Fund Fees Go and What Do You Get For Them?


A thing is too expensive if the value you receive is less than the cost of acquisition. The numbers don’t matter, only the comparison matters. To get value, you must have cost. That is true for anyone buying anything. For mutual funds, the amount… Continue Reading “Where Do Mutual Fund Fees Go and What Do You Get For Them?”

Is The Price Of A Mutual Fund Too High?


“The question of whether investors would buy mutual funds if they knew the true cost — and at what point the cost is too much — is moving to the forefront of a raging debate.” is the lead to a story by Barbara Schecter… Continue Reading “Is The Price Of A Mutual Fund Too High?”

Charity or Philanthropy


Charity is an event.  Philanthropy is a process.  Why choose philanthropy? The research indicates that families that practice philanthropy tend to be more successful.  I don’t know why exactly, but I can speculate that families that practice philanthropy are less self-absorbed and that may… Continue Reading “Charity or Philanthropy”

Seek To Understand


In 2007 Alan Mulally, president of Ford, clarified one of Ford’s significant problems. In a meeting at Consumer’s Reports, Ford vehicles were being savaged. The Ford people were defensive and rationalizing. According to Bloomberg Businessweek 03 June 2007, Mulally’s response was simple. He handed… Continue Reading “Seek To Understand”

Tax Alpha


In investment parlance alpha is the risk-adjusted excess return, after fees, of a fund compared to a benchmark index.  It is very difficult to achieve a positive investment alpha over a long period.  Wise investors look to more than the fund manager for alpha. … Continue Reading “Tax Alpha”

If Things Are Different, They Are Not The Same


On 10 October 2008, 11.5 billion S&P 500 shares changed hands. In the 19 years from January 1951 to December 1969, there were fewer than 25 billion shares that traded. Barely double. One day, half as many as 19 years. In the decade of… Continue Reading “If Things Are Different, They Are Not The Same”

The Rule of 72


The rule of 72 is an arithmetic trick that helps you understand compound growth.  It will not make you intuitive but it will help you to understand when to look deeper. Here’s how it works.  The time until money doubles under a constant rate… Continue Reading “The Rule of 72”

Stress And Responses To It


Decision making under stress is a losing activity so avoid re-organizing your financial affairs when you are stressed. The decision is important and can affect a long time. Stress puts too much emphasis on immediate factors. Giora Keinan in a 1987 article (Journal of… Continue Reading “Stress And Responses To It”

The Equal Division Of Nothing


“Some regard private enterprise as if it were a predatory tiger to be shot. Others look upon it as a cow that they can milk. Only a handful see it for what it really is – the strong horse that pulls the whole cart.”… Continue Reading “The Equal Division Of Nothing”

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