Do Bull Markets And Great Depressions Affect Your Stock Market Psychology?

One of the social theories out there that seems intuitively appealing (at a minimum) is the notion that the market conditions that exist at the time you came of age has an outsized influence on your subsequent behavior. If you find people who have lived through the Great Depression, they have socks hidden throughout their houses with balls of $100 bills in them. The post-death inventorying of the possessions of their estates is a macabre Easter egg hunt where you stumble upon assets in the most unexpected of places. Because of the widespread availability of credit and lack of society-wide severe economic hardship, Americans coming of age during the 1990s aren’t conditioned to … Read the rest of this article!

Ralph Lauren Stock’s Defenses

I have long been interested in the history of Ralph Lauren stock, which has defied the typical short-lifespan of fashion retailers to become an actual compounder for its investors. Almost twenty years ago, the stock could have been purchased for $18 per share. Now it trades above $100 per share, and almost $18 per share in dividends have been paid out along the way. Its eighteen-year compounding rate has been 11.1%, counting dividends but not assuming reinvestment.

It’s not the type of company that I take seriously as an investment. This summer alone, the Wall Street Journal has reported on the bankruptcy of Barney’s and (soon) Forever 21, and that’s about what you’d … Read the rest of this article!