In the mid-1990s, I was meeting with the representative of a company that was raising capital for a partnership that would purchase a number of apartment buildings around the southeast. I was questioning him about what appeared to be a terribly unfair fee structure.  The salesman assured me that my focus was misplaced.  “Don’t worry about all of the boilerplate language in the back of the document. Look at all the great photos in the front!” Variable annuities, non-traded real estate investment trusts, private investments advertised on the radio, any investment advertised on television … a substantial percentage of the … Read More

Decades after the masks are gone, in-person college classes are a quaint memory and “flatten the curve” is a long-forgotten rallying cry, the U.S. will continue its fight against COVID-19. Well, we’ll still be paying for it, anyway. Last week, the Congressional Budget Office released its preliminary estimate of federal income and expenses for the government’s 2020 fiscal year, which ended on September 30. During those 12 months, the federal government is estimated to have collected $3.4 trillion in taxes and spent $6.5 trillion, creating a one-year record deficit of $3.1 trillion. Prior to COVID, the 2020 deficit was expected … Read More

Tom Magliozzi, co-host of NPR’s Car Talk show, described the formula for happiness as reality minus expectations. The equation is simple; people are generally happy when the reality of life is better anticipated. Unreasonably high expectations are often a recipe for disappointment. This same formula can be loosely applied in the evaluation of investment outcomes. Too often, investors flock toward the strategy of owning the most high-flying growth stocks, choosing to avoid pesky details such as price. The problem with this approach is that it rejects any acknowledgement that all investments should be measured against expectations. Being the first to … Read More

A young friend of mine recently interviewed for a job via Zoom. His suspicion that the interviewer was conducting the meeting from a bedroom was confirmed when from underneath the comforter behind the interviewer crawled a t-shirt clad female, who walked out of the frame – followed by the sound of a toilet flushing. A congressman in Argentina wishes that’s all he had broadcast to the outside world. During a virtual debate about pension fund investments, Chamber of Deputies member Juan Ameri was seen onscreen kissing his girlfriend’s bare breasts, explaining afterwards that he thought he’d lost his internet connection and … Read More

Let’s look back at the good ole’ days … say about nine months ago. (Just humor me, okay?) Unemployment was a paltry 3.5 percent, the lowest since the 1950s. Real personal income was increasing at rates not seen in more than 20 years, most rapidly among low and middle-income wage-earners. As far as we knew, the U.S. hadn’t recently started or joined a new war anywhere on the globe. Not surprisingly, the Dow Jones Industrial Average was at an all-time high and would finish 2019 with a 22 percent gain. The tech-heavy NASDAQ would finish even higher. If you are … Read More

When I hear someone tell a young person that “college is the best time of your life,” I wince and think how sad it must be for a person’s life to peak at 22. College was fun, but, fortunately, it was not the best time of my life. It was however, the most important time in my life – a fact that had little to do with classroom instruction. Almost all the memorable value of my years in college is related to relationships. I forged lasting friendships with a number of my professors, such as Bruce Wheeler and Dick Townsend. … Read More

The COVID-19 economic shutdown has never been easy, but it was certainly easier in April than it is now. Initially, practically everyone was willing to sacrifice when we assumed the shutdown was a temporary measure to protect the healthcare system (“15 days to flatten the curve!”). And for many people, the early days of lockdown imposed little-to-no financial loss. In the first months of lockdown, U.S. personal income actually increased, thanks to $3 trillion in federal stimulus spending. Two rounds of Paycheck Protection Program loans helped support about a third of all jobs in the country. Unemployment benefits, aided by … Read More

There were two notable Warren Buffett events on August 30. The famed investor turned 90 years old and he disclosed a $6 billion investment in five Japanese conglomerates. The move surprised many Buffett watchers, especially given his history of investing almost solely in U.S. companies. Buffett’s foray into Japan shows us that it is possible to teach an old dog new tricks, but only if the dog really wants to learn. Researchers tell us that when a person reaches the age of 25, the default condition is for the brain to become lazy. People tend to transition from being learners … Read More

A recent KnoxNews article featured a group of Knoxville women who are working to address local poverty by helping would-be business owners access startup and working capital. I am a huge fan of small business and entrepreneurism, and I wish the ladies much success. But most not-poor people don’t get that way by starting a business. The cause of poverty is not a lack of access to capital. If not a lack of capital, what are the best predictors of poverty? Some of the answers are complex. Some are obvious. Almost all are very uncomfortable to discuss – but ignoring … Read More

A recent discussion between CNBC guests focused on the surprisingly healthy demand for cars in the $500,000 to $1 million price range. My first thought was that this must be a sign of the coming apocalypse. These crazy people clearly have more money than they have sense. My second thought was about the first house my wife and I purchased in 1987, specifically, my father-in-law’s reaction. He thought we were being frivolous. We were new college graduates, in our first grown-up jobs. We had saved enough for a down payment, but otherwise didn’t have a nickel to our names. My … Read More