I was just reading over Michael J. Burry’s commencement speech to graduates at UCLA, and I came across this passage in his speech that I’d like to share with you:
“Information swarms us. It comforts us. It disrupts us. It’s an Age of Infinite Distraction, for those so willing. You are the generation that has had instant messaging, Facebook, Twitter, and Angry Birds nagging your fingertips at every moment. It’s been arguably as addictive as any other drug throughout history. And I do imagine it took some terrific willpower during your studies to study.”
If I had to make a short list of the things most likely to mess up the execution of a long-term investing strategy, I would dedicate a slot to what I call “information overload.”
“Information overload” is one of those subtle things that can make it incredibly easy to deviate from a long-term strategy. When Mayor … Read the rest of this article!
It is sadly not uncommon enough in the United States for a parent to outlive their child–a tragedy that befalls approximately 8% of families. I have been reviewing recent state law decisions, and I have encountered a few instances in which the estate planning documents for an individual that were prepared before the death of the child.
A per stirpes distribution occurs when the children of the deceased beneficiary stand in the shoes of that deceased beneficiary to receive the share that the deceased beneficiary would have received if he had remained alive. This default rule assumes that the deceased beneficiary still receives a share to be equally divided among any of his surviving children, and if no surviving children, then surviving grandchildren.
Illustration: Joe prepares a Last Will and Testament that calls for his 2018 Porsche 944, valued at $100,000, to be sold and distributed among his three children–John, … Read the rest of this article!
When I was a little kid, there was this hamburger joint in Clayton, MO that served calfburgers with a cheddar cheese spread and steak fries. My dad used to take me there back in the day, and it was the kind of burger joint experience that Norman Rockwell could have spent some time turning into a painting.
But over the past couple of years, the management team at that burger joint began taking advantage of its brand equity and made no hesitation when it came to engaging in questionable business practices that likely alienated the consumer base. First, they segregated each item into individual pieces while simultaneously raising the price of each—for instance, what once was a cheeseburger and fries for $7.99 turned into a $5.99 hamburger, plus $0.99 for cheese, plus $2.25 for fries. The price of drinks went up from $0.99 to $1.99, and they began charging $0.25 … Read the rest of this article!
What screws a lot of people up from accomplishing good things in life is this desire to wait for the moment to be perfect before beginning. The problem with that mentality is this: there will never come a moment when everything seems perfect for you to get started.
I remember how my writing on the website Seeking Alpha got started. At the time, I was working for a Missouri Congressman from 8:00 AM to about 6-6:30 PM. For a while, I told myself that I’d wait for things to “settle down” before I’d get started. Eventually, I realized that I was only two weeks away from returning to college (and I’d be busy doing lord knows what, then) and if I didn’t hunker down and start writing, it would never happen.
I had this vision in my head of being able to sit down for an afternoon and pour through … Read the rest of this article!
More so than most, I have long been intrigued by the 1960s fad of investing in conglomerate stocks. You have these beautiful, completely unrelated businesses that churn out profits under nearly all economic conditions, and, if properly managed, are immune from bankruptcy unless the conglomerate itself takes takes on too much debt or an insurance liability that could take down the parent entity if manifested.
The downside of conglomerate investing is that, as a class, conglomerate indices tend to underperform the S&P 500 Index. The theory is that each member of the portfolio is unable to reach its potential due to a lack of focus as individual business lines become neglected because no individual part receives extensive care and attention.
However, I believe that the underperformance of the conglomerate is tolerable because, in the event that there is a corporate spin-off event, you were already sitting there at the low … Read the rest of this article!