10 years ago today

I was looking at the date and I realized it is roughly 10 years ago that I was hired at Smith Barney (10 years ago owned by Citigroup) to do business development for some advisors there. It got me to thinking how much has changed since then.

10 years ago

Not a single line of code for Facebook had been written.

Google wasn’t a publicly traded company yet.

Apple was $18.80 per share (Now $428.85).

Microsoft was $25.57 per share (lagging a bit behind ...

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More on Less Americans with Stock

The fact that fewer people own stock is not a bad thing, at all — because, in my mind, most individual investors are too heavily weighted in stock. This causes a lot of stress and financial difficulty and, unfortunately, is one of the easiest investing mistakes to make.

Investing is relatively simple, but without competent professional help most families will start making mistakes, often subconsciously. A few seemingly small errors often add up to a serious ...

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The Mythical Investment Nebula!

Should a lot of Americans own stock?  The New York Times and, more amusingly, Gawker have written about a recent Gallup survey that found the percentage of Americans owning stocks, in one form or another, is declining. The articles are a bit unclear about exactly what this means, but in the journalists’ opinion, one thing is for sure – more Americans have missed out ...

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Those who really know don’t tell

When I was in high school and trying to make sense of investing, something always perplexed me.  My teenage thought process went something like this:

“I know there are a lot of stockbrokers and investment guys out there at all sorts of investment firms. Are they all really rich? It seems like they should be rich if they know how to pick stocks.  Do their clients get the same investments that the brokers get for themselves?  ...

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Enlightenment from (the Great) Depression

It’s hard to believe that exactly 80 years ago — nearly a century — our country was in the depths of the Great Depression. Although our world today is completely different in countless aspects, you can still get a lot of insight from finance and economics writings from that era. This is especially true for the years 1932 to 1934.

Risk, Uncertainty and Profit by Frank H. Knight was first published in 1921 and reprinted several ...

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Message in a Bottle: Lessons in Volatility

When brokers talk to clients or prospective clients, they are supposed to keep some sort of notes to the conversation. This is especially important for compliance purposes. It is necessary to have something that shows you “know the customer” to make sure you are making reasonable recommendations for them. Sometimes the content of these notes can be telling.

I started my career in 2002, just as the tech market was bottoming off the crash that started ...

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Beyond the Coin Toss: Thoughts on Investments

Early in my career I had a job at what would be considered an “old school” brokerage. Business was done almost exclusively on the phone. We sold stocks on commission.  Every once in a while there would be a wise crack from a broker in the room trying to sell a client.

Client: “I’ll pass on this one.”

Broker: “The only people that ever made money passing were quarterbacks and racecar drivers. Let’s pick up 100 shares.”

I didn’t spend ...

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If You Can’t Beat ‘Em, Don’t Risk Your Inheritance Trying

Beating the market is hard to do. And it is not just hard – like running a marathon is hard. Trying to beat the market is laden with peril because you have to risk money. So when I say beating the market is hard, I mean it in the sense of “walking a tight rope without a safety net” rather than “running a marathon.”

A mathematical impossibility

The first step in understanding how investments work is to ...

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Why Margin Isn’t Even Marginal, at Best (Part I)

I generally advise families to avoid using margin for investment purposes. This applies to the accounts I manage and to the investment vehicles I recommend in those accounts (mutual funds, ETFs, etc). There are several reasons why.

 The “L” word

First and most obvious, with the leverage that margin enables, there is a greatly increased chance that an investor will be totally wiped out by a market downturn. When a family is investing for generations, there will ...

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From a Tiny Island, a Lesson in Global Thinking

This photo was taken on Montpelier Beach in Nevis, a tiny island in the Caribbean that plays a big role in North American history. Christopher Columbus sailed past Nevis on his second trip across the Atlantic. John Smith landed at Nevis on his way to Virginia in 1607. When I was on Nevis I visited the site where Alexander Hamilton was born, and another where Admiral Horatio Nelson was married.

In the late 1600’s, Nevis was one ...

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