Kevin Duffy on how government creates problems

Government germinates, nurtures and harvests problems.  They are the sustenance of the state.

~ Kevin Duffy, tweet, May 31, 2021

George Carlin on political correctness

Political correctness is fascism pretending to be manners.

~ George Carlin

Ludwig von Mises on war and peace

War...is harmful, not only to the conquered but to the conqueror.  Society has arisen out of the works of peace; the essence of society is peacemaking.  Peace and not war is the father of all things.  Only economic action has created the wealth around us; labor, not the profession of arms, brings happiness.  Peace builds, war destroys.

~ Ludwig von Mises, Socialism (1922)

Steve Jobs on work and passion

The only way to do great work is to love what you do.

~ Steve Jobs

Henry Ellenbogen: "Companies are like biological organisms"

Companies are like biological organisms.  They're either fundamentally healthy or out of balance.  If they're in balance with their employees, customers, shareholders and the greater community they can grow and thrive.  If not, they can seem in sync for a while, but eventually there will be an imbalance.

~ Henry Ellenbogen, Durable Capital Partners

Warren Buffett on discipline and investing

We don't have to be smarter than the rest. We have to be more disciplined than the rest.

~ Warren Buffett

Warren Buffett on patience and investing

The stock market is a device for transferring money from the impatient to the patient.

~ Warren Buffett

John Heins on the new value investors

The next generation is not as recognizable for people with a standard view of what a value investor is.  They are more eclectic, focused more on special situations.  Some have the head of a growth investor and heart of a value investor.

~ John Heins, editor-in-chief, Value Investor Insight, "The New Value Hunters," Barron's, May 22, 2021

Thomas Sowell on environmentalism

I wish that some way could be found to add up all the staggering costs imposed on millions of ordinary people, just so a relative handful of self-righteous environmental cultists can go around feeling puffed up with themselves. 

~ Thomas Sowell

Save Our Cities, Soil, Air, Water
1970

Warren Buffett on thinking and investing long-term

I never attempt to make money on the stock market.  I buy on the assumption that they could close the market the next day and not reopen it for ten years.

~ Warren Buffett

Seth Klarman on Benjamin Graham

As the father of value investing, Benjamin Graham, advised in 1934, smart investors look to the market not as a guide for what to do, but as a creator of opportunity.

~ Seth Klarman

Will Rogers on consumption

Too many people spend money they earned... to buy things they don't want... to impress people that they don't like.

~ Will Rogers

Walter Bagehot on euphoria

All people are most credulous when they are most happy. 

~ Walter Bagehot

Charles Mackay on the South Sea bubble

Nobody seemed to imagine that the nation itself was as culpable as the South Sea Company.  Nobody blamed the credulity and avarice of the people — the degrading lust of gain... or the infatuation which had made the multitude run their heads with such frantic eagerness into the net held out for them by scheming projectors.  These things were never mentioned. 

~ Charles Mackay, Extraordinary Popular Delusions and the Madness of Crowds

John Kenneth Galbraith on divorce

The happiest time of anyone's life is just after the first divorce.

~ John Kenneth Galbraith

John Kenneth Galbraith on decisiveness

A wrong decision isn't forever; it can always be reversed.  The losses from a delayed decision are forever; they can never be retrieved.

~ John Kenneth Galbraith

John Kenneth Galbraith on change

Change comes not from men and women changing their minds, but from the change from one generation to the next.

~ John Kenneth Galbraith

John Kenneth Galbraith on the role of economics

Economics is extremely useful as a form of employment for economists.

~ John Kenneth Galbraith

Julia Cameron gives career advice

What we really want to do is what we are really meant to do.  When we do what we are meant to do, money comes to us, doors open for us, we feel useful, and the work we do feels like play to us.

~ Julia Cameron, author of The Artist's Way

Thomas Edison on opportunity

Opportunity is missed by most people because it is dressed in overalls and looks like work.

~ Thomas Edison

A.R.J. Turgot on taxation

It seems that Public Finance, like a greedy monster, has been lying in wait for the entire wealth of the people. 

~ A.R.J. Turgot, 1763

Charles Dickens on the best and worst of times

It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of light, it was the season of darkness, it was the spring of hope, it was the winter of despair.

~ Charles Dickens, A Tale of Two Cities

Warren Buffett on the value of bear markets

A market downturn doesn't bother us.   It is an opportunity to increase our ownership of great companies with great management at good prices.

~ Warren Buffett

Ben Inker on the bubble in speculative stocks unwinding

If the whole of the market is dominated by speculators with outsized expectations, it seems likely that deflation in the obviously speculative tier will take the overall market with it.

It is not a coincidence that value today is close to as cheap as it has ever been relative to the market, but it is convenient nevertheless. You can protect your equity portfolios by choosing to bias them toward value and away from the most expensive end of growth.

~ Ben Inker, head of asset allocation at GMO, "This signal is telling investors that highflying stocks are ready to fall back to Earth, says fund manager," MarketWatch, May 19, 2021

Stan Druckenmiller on the Fed and inequality

I don't think there's been any greater engine of inequality than the Federal Reserve Bank of the United States the last 11 years.

~ Stanley Druckenmiller, May, 2021

Tony Robbins on taking action

I love quotes... but in the end, knowledge has to be converted to action or it's worthless.

~ Tony Robbins

Chris Mayer on social media and investing

How has social media, for example, changed investing? 

It seems impossible that the whole GameStop episode happens in a world without social media… which allowed users to organize in a way and at a speed that would’ve been impossible in the days before the internet.  Certainly, stock prices have diverged from “reality” before.  But to this extent? 

What kind of effect does Twitter have on people?  Investing is a long game.  It requires patience and discipline and being able to put up with droughts of performance.  It is hard.  How much harder is it today just because of our media? 

Or does it make it, in some ways, easier?  I know I have made many valuable contacts (and friends) through Twitter.  I have been able to tap expertise I would not have been able to find otherwise, or at least, it would’ve been much harder.  We share ideas and research.  These interactions have been enormously beneficial for me.

~ Chris Mayer, "The Medium is the Message," Woodlock House Family Capital blog, March 26, 2021

Rick Rule on the bull market in precious metals

I suspect that the duration on this gold bull market is greater than people think. And I think the dimension is greater than people think, too, because gold and precious metals move when people are concerned about the debasement of the currency and the impact that that has on the purchasing power of their savings. And anybody who isn't concerned about quantitative easing, debt and deficits and negative real interest rates I believe needs to have their head examined. So I'm constructive to higher precious metals prices and hence higher prices around companies that produce them.

~ Rick Rule, "Where to Find Big Gains in Resource Stocks," Stansberry Investor Hour, 34:00 mark, May 13, 2021

Rick Rule on financial regulation

It seems to me that the apparatus of regulation is designed to protect the public from a few bad apples who pay no attention to regulation whatsoever. It seems that most of the impact of regulation is to constrain the flow of information from honest people to honest people around the vainglorious hope that you can protect investors from their own worst instincts, and from some of the worst elements of humanity, something that I believe is futile. I actually believe that investors would be better served if they understood that neither FINRA nor the SEC can protect them and they had to do the work to protect themselves. 

~ Rick Rule, "Where to Find Big Gains in Resource Stocks," Stansberry Investor Hour, 16:00 mark, May 13, 2021

Jeremy Grantham on the everything bubble

This is pretty bad on a very broad front [stocks, bonds, commodities and real estate]. We will have to live potentially, possibly, with the biggest loss of perceived value from assets that we have ever seen.

~ Jeremy Grantham, recent Business Insider article

(As cited by Dan Ferris in his Quote of the Week on his Stansberry Investor Hour podcast, May 13, 2021.)

Plato on politics

If you do not take an interest in the affairs of your government, then you are doomed to live under the rule of fools.

~ Plato

Thomas Sowell on voting

If you are not informed, then the most patriotic thing you can do on election day is stay home.

~ Thomas Sowell

Michael Brendon Dougherty on how Covid-19 warped assessments of risk

At some point, the pandemic — the provisional and practical judgments in favor of caution that can justify restrictive behaviors — became an unshakeable moral purpose.  Actual weighing of risks went out the window: There’s a deadly disease out there; my actions can contribute to the end of the disease or to its spreading in perpetuity. 

It’s as if a circuit has been fused.  While caution and restrictive behavior can be justified by a conscience informed by the risks, the human mind can also make calculations based on superstition.  And one frighteningly common one is the equation of science with truth, fear with realism, and caution with virtue.

~ Michael Brendon Dougherty, "COVID-19 Rewired Our Brains," National Review, May 3, 2021

CDC Director Dr. Rochelle Walensky speaks before the
House Select Subcommittee on the Coronavirus Crisis,
April 15, 2021

Seth Klarman on his investment firm's competitive advantage

To outperform over time, managers must find edges that enable them to earn excess returns.  We believe that we have real edges as a firm, such as our truly long-term focus and flexible investment mandate (including holding significant cash balances).  In today's frenetic marketplace, these edges seem more enduring than ever.  Most of our competitors feel intense pressure from their clients to generate short-term performance and have trouble maintaining a truly long-term perspective, whether in bad markets or good.  They also operate with partnership structures and a client base that restrict their investment mandate.

Our ability to stay the course and move in a decisive and concentrated way into the most attractive areas of opportunity was enormously important during the 2008-2009 crisis, as many of our competitors pulled back from making new investments after sustaining significant losses.  We, by contrast, were able to consistently add to positions that were becoming increasingly attractive.  We exepect that this same value discipline and long-term focus will help us avoid getting caught up in market bubbles that most competitors simply cannot resist, while serving us well in future pockets of turbulence.

~ Seth Klarman

Seth Klarman on planting seeds during bear markets

Sometimes buying early on the way down looks like being wrong, but it isn't.

~ Seth Klarman

Mark Hulbert on timing a bubble

Needless to say, things don’t go up forever.  Those who nevertheless continue to invest in such an environment do so with the implicit assumption that they will be able to recognize it, in advance, when the bubble is about to pop—and therefore able to leave the party before everyone else.  This is a dangerous delusion, however; not everyone can be the first to leave the party.

~ Mark Hulbert, "The psychology of a stock market bubble," MarketWatch, April 24, 2021

Sometimes people are drawn to investing
because of 'gambler's excitement'

Prince Harry on vaccines

But we’re also coming together because this pandemic cannot end unless we act collectively with an unprecedented commitment to our shared humanity.  The vaccine must be distributed to everyone everywhere.

We cannot rest or truly recover until there is fair distribution to every corner of the world.  The virus does not respect borders and access to the vaccine cannot be determined by geography.

~ Prince Harry, Duke of Sussex, "Prince Harry urges people to get vaccinated: ‘This pandemic cannot end unless we act collectively’," MarketWatch, May 3, 2021

Sam Zell on welfare incentives not to work

We've created a welfare society that is really discouraging people [from working].  When you can make as much or more by collecting unemployment insurance, and supplemental this and supplemental that, that's pretty dangerous stuff.  Clearly, we're having trouble getting everybody back into the workforce because the alternative is so attractive.

~ Sam Zell, "Sam Zell Buys Gold With Inflation ‘Reminiscent of the ‘70s’," Bloomberg interview, 2:25 mark, May 4, 2021

James M. Meyer on change and the need for investors to adapt

As investors, you can’t afford to fall in love with everything you own.  While taxes may lock you in, staying with an old favorite in decline will cost you more money in the end.  In 1980, the top 10 of the Fortune 500 were (in order) Exxon, General Motors, Mobil, Ford, Texaco, Gulf Oil, IBM, GE, and Amoco.  Four have been swallowed, General Motors went bankrupt before recovering, and GE has been a well documented mess.  If I moved forward to 2000, the most notable addition would have been Walmart.  The only tech name was still IBM.  If I moved forward to 2020, the only name on all three lists is ExxonMobil.  You get the message.  Times change and investors need to change as well.  But pioneers and dreamers rarely rise to the top.  That’s what makes investing challenging.

~ James M. Meyer, Tower Bridge Advisors Market Commentary, April 21, 2021

Lisa Beilfuss on the weak jobs report

There is a conundrum facing the U.S. economy: The very stimulus that has prompted a faster-than-expected recovery seems to be undermining it. 

That is one interpretation of the April jobs report released Friday, which showed employers added only a fraction of the jobs Wall Street expected and hired at the slowest pace since January.  Economists called the report puzzling; some said it should be ignored. 

~ Lisa Beilfuss, "Are We Overstimulated? April’s Weak Jobs Report Says Yes.," Barron's, May 8, 2021

Benjamin Graham on the investor's biggest problem

The investor's chief problem - even his worst enemy - is likely to be himself.

~ Benjamin Graham

William Green on what makes Joel Greenblatt a great investor

I try to explain the traits that he embodies that I think you need to be a great investor.  He has this kind of cold rationality, tremendous independence of mind, he's got guts, he's got these sturdy principles that he believes in through think and thin, he's super competitive, very disciplined, even-tempered, patient. 

~ William Green, "How the World's Greatest Investors Win at the Market," Stansberry Investor Hour, 57:00 mark, May 6, 2021

Joel Greenblatt on investing without a compass

If you buy stocks without knowing what you're looking for, it's like having a lit match and running through a dynamite factory.  You may still survive, but you're still an idiot.

~ Joel Greenblatt

(As told by William Green on the Stansberry Investor Hour with Dan Ferris, 53: 30 mark, May 7, 2021.)

Morningstar on strong ESG fund flows and launches

Assets in U.S. sustainable funds have stayed on a steady growth trajectory.  As of March 2021, assets totaled nearly $266 billion.  That’s a 12% increase over the previous quarter and a 123% increase year over year.  Active funds retained the majority (60%) of assets, but their market share is shrinking.  Three years ago, active funds held 82% of all U.S. sustainable assets. 

As U.S. flows into sustainable funds have gained traction, asset managers have responded by growing their sustainable fund lineups.  In the first quarter of 2021, 11 funds were launched in the U.S. with sustainability mandates.  Of those 11, 10 were equity funds, and eight were exchange-traded funds.  Once again, most of the new sustainable funds available in the U.S. are actively managed offerings.  Two of the new funds target hydrogen power, an emerging focus for renewable energy investors: Direxion Hydrogen ETF (HJEN) and Defiance New Gen H2 ETF (HDRO).

~ Allyssa Stankiewicz, "Sustainable Fund Flows Reach New Heights in 2021’s First Quarter Green funds are blossoming this spring," Morningstar, April 30, 2021

Visual Capitalist on U.S. generations and political power

Baby Boomers rank number one when it comes to Political Power. 

Boomers capture 47.4% of political influence. This generation accounts for 32% of all U.S. voters, and holds the majority of federal and state positions. For instance, 68% of U.S. senators are Baby Boomers. 

Political spending on election campaigns and lobbying predominantly comes from Boomers, too. When it comes to money spent on lobbying, we found that 60% of the top 20 spenders were from organizations led by Baby Boomers. 

In contrast, Millennials and Gen Zers barely make a splash in the political realm. That said, in the coming years, it’s estimated that the combined voting power of Millennials and Gen Z will see immense growth, rising from 32% of voters in 2020 up to 55% by 2036.

~ Carmen Ang, "Ranking U.S. Generations on Their Power and Influence Over Society," Visual Capitalist, May 6, 2021

Jim Rohn on getting things done

If you really want to do something, you'll find a way.  If you don't, you'll find an excuse.

~ Jim Rohn

Jim Rohn on education

Formal education will make you a living; self-education will make you a fortune.

~ Jim Rohn, motivational speaker

Charles de Vaulx on the future

Only God knows the future and he ain't telling us.

~ Charles de Vaulx, R.I.P.

Charles de Vaulx
1962-2021

Thomas Paine on critical thought and freedom

When men yield up the privilege of thinking, the last shadow of liberty quits the horizon. 

~ Thomas Paine, Reflections on Titles (1775)

Thomas Paine
1965-1968

Kevin Duffy on how to navigate bubbles

The roadmap to navigating a bubble lies in its split personalities: limit your exposure to the most bubbly areas and seek refuge in the anti-bubbles.  As the red flags stack up and risks multiply, forget about timing and outperforming the S&P 500.  This is a fool’s errand. 

Resisting the siren song and chaining oneself to the mast is challenging, but easier for the disciplined individual than the investment professional.  A large number of subscribers to this newsletter are employed in the investment industry.  My only advice: try to chart a sound course over appeasing clients, even if it means firing some.  Easy for me to say… I wish you well!

~ Kevin Duffy, The Coffee Can Portfolio, April 26, 2021