Famous investor and billionaire Warren Buffett has never lost his Midwestern values. He still lives in the same house he purchased in 1958 for $31,500, and his taste in food doesn’t go much beyond hamburgers and steak. There are stories told of Buffett attending multi-course dinners prepared by world famous chefs where Buffett wouldn’t touch…
Humans hate to lose. In fact, behavioral economists tell us when it comes to money we hate losing more than twice as much as we like winning. This is called loss aversion, and if we are not careful it can lead to irrational investing decisions. Paul Samuelson, noble winning economist, once tested this theory…
A cat who sits on a hot stove will never sit on a hot stove again, but he will probably never sit on a cold one either. – Mark Twain A recent survey by Bankrate.com found that over half of Americans don’t have any money invested in the stock market. While those that don’t invest…
Adopt the pace of nature; her secret is patience. –Ralph Waldo Emerson, American author, poet, and philosopher Last year I lost my cell phone on an out of state trip. I prepare taxes out of my home as a side job and we were just entering the tax season. I knew my customers would be…
“Periodic outbreaks of those two super-contagious diseases, fear and greed, will forever occur in the investment community. The timing of these epidemics will be unpredictable. And the market aberrations produced by them will be equally unpredictable, both as to duration and degree. Therefore, we never try to anticipate the arrival or departure of either disease. …
Most Investors follow the crowd down the path to comfortable mediocrity. – David F. Swensen Somewhere (I am not saying where) there is a picture of me at a high school dance, circa 1980. My hair is longish and parted in the middle. I am wearing a powder blue polyester suit with airplane wing collars…
In the past I have written about “Save More Tomorrow,”, an innovative plan that uses the principles of behavioral finance to help people increase their retirement savings over time. Here is a link to my prior post, titled “Use the ‘Wimpy’ Savings Plan to Increase Your Savings Rate“. I recently ran across an interesting TED talk by Shlomo Benartzti,…
If you are a parent, and have had a child achieve the milestone of getting a driver’s license, you know how expensive it is to insure teenage drivers. If you have had both a boy and girl reach this milestone you probably also noticed that it was significantly more expensive to insure the boy than…
I have written before about Warren Buffett’s million dollar bet with New York asset manager Protégé Partners that the Vanguard S&P 500 Index Fund, over a period of ten years, would beat a collection of hedge funds selected by Protégé. The proceeds from the bet will go to charity. The bet was made in 2008…
If you can keep your head when all about you are losing theirs… Yours is the earth and everything that’s in it… – Rudyard Kipling from his poem If In his classic book The Four Pillars of Investing, William Bernstein wrote, “The major premise of economics is that investors are rational and will always…
