3 things I'm thinking about this week...
3 things I took away: Bubbles can happen at the company level (over-investing in data centers) as well as the market level (overvalued stocks). Bubbles build as we prize “newness” over long-term market history, since doing so would get in the way of embracing the latest new thing. This is particularly distressing to me….one of our central jobs as financial advisers is to provide clients with long-term historical context, reminding them that “this time isn’t different.” And Marks classifies bubbles into two types, “mean-reversion” like the 2000s sub-prime mortgage debacle vs. “inflection” where irrational exuberance encourages investment in emerging technologies. The inflection bubble actually can bring some good as it jumpstarts technological progress, but neither type is good for investors and in fact can result in permanent capital loss.
Why does any of this matter? Investing is about behavior – avoiding pitfalls is as important as finding a home-run investment. Case in point: Cisco stock recently hit a new high, over a quarter-century after its last one. Times like today can lead investors to abandon sensible investing and shift to overheated market segments…at the very worst time.
2 - (Not) Keeping Busy in Retirement (or Just the Opposite). Don’t know if I could pull this off myself, but this short article highlights the joys of doing nothing in retirement. Getting away from everything having to be an “activity” is a different perspective worth reading about.
Retirement is probably not the right way to describe MacKenzie Scott’s current life phase, but giving is often a big part of retirement. She is setting records for philanthropy, having given away $26 billion since 2019 with a unique approach worth a read here (a former schoolmate of mine is quoted near the end).
3 - Old-Timers. After working for a few decades, you might feel like you’ve got a few things figured out. And then you read an article like this – a profile of some of the longest-tenured employees at Target, Ford, Tiffany & Co. and others, holding jobs they took in some cases during the Kennedy Administration! 3 reasons they’ve lasted so long: staying busy (and fit), loving people (one said social connections more important than ever in a more automated/electronic world), and doing tasks (engraving at Tiffany) that AI might not come for right away.
…and one more thing
The U.S. is #1 one in a lot of good things. Unfortunately, also in global debt.
