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Creative Destruction
Up until the 1890s, horses and buggies ruled the land. There were incremental innovations within that ecosystem but nothing transformative. Then Henry Ford came along with the Model-T car and the buggies were history. Gutenberg’s invention of…
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Commodities Are Never Investments
Investing is like planting a tree. You put in the effort once and then the fruits keep on coming. That is akin to buying stocks. Dividends are the fruits, and the tree is the business…
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Spotting Asset Bubbles
JFK‘s father, Joseph “Joe” Kennedy, exited the stock market right before the 1929 crash when he heard his shoeshine boy give stock advice. He figured that if a shoeshine boy is giving him a rundown on…
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The Economic Value Chain
Abraham Maslow describes in his groundbreaking 1943 paper a pyramid of needs that must be met in more or less a sequence before human beings can realize their full potential. Food, clothing, and shelter form the base of…
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Freeze Your Credit
Your identity will never be stolen – until it does. And once your thing is out there, it becomes a mess. You thought you cleaned it up and then it pops up again. Millions fall…
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Risk & Return
Treasury bonds are issued by the Federal government. Bonds with a maturity of one year or less are called Treasury bills but they are still bonds. So, say the year is 1999 when a one-year…
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Stock Splits Don’t Make Stocks Cheaper
Berkshire Hathaway class A shares trade at hundreds of thousands of dollars. This below is the price for a single share… Apple shares trade at hundred and some dollars apiece. And the shares of Uber…
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On Crypto
Crypto is not an investment. It can never be an investment. The United States dollar is not an investment. The Japanese yen is not an investment. The Euro is not an investment. None of these…
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On Bear Markets
Economist Hyman Minsky once wrote that stability brings instability. The more stable things become, and the longer things remain stable, the more unstable the system gets until an eventual crisis hits. And it makes sense. When there…
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Pascal’s Wager
My first experience with a stock market boom and bust cycle was back home in India in the early 90s in what was deemed the ‘Harshad Mehta scam’. It was a classic pump and dump…