No one has the ability to predict what will happen in the financial markets. For most of its existence, the investment business was driven by information. Today, and unlike the past, most of us have access to the same information. What it means has now taken center stage. The world we live in is infinitely complex. We like to think that intelligence and effort can readily overcome the vagaries of the markets. That’s largely because we are addicted to certainty. However, the financial markets are simply too complex and too adaptive to be readily predicted.

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There is a beautiful and melancholic word I like called anemoia. It means nostalgia for a time or a place one has never known. This is a sentiment I often sense from Gen Z—especially in recent years. New technologies cheapen and undermine every basic human value. Friendship, family, love, self-worth—all have been recast and commodified by the new digital world: by constant connectivity, by apps and algorithms, by increasingly solitary platforms and video games. I watch ‘90s videos, and I have the overwhelming sense that something has been lost. Something communal, something joyous, something simple.

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There are old investors, and there are bold investors, but there aren’t many old bold investors. As with so many aspects of investing, determining the proper amount of leverage has to be a function of optimizing, not maximizing. Extreme volatility and loss surface only infrequently. And as time passes without that happening, it appears more and more likely that it’ll never happen

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SEINFELD: In the eighties, this is the tragic turn of American culture. And this was explained to me by Mario Joiner who cracked this puzzle that I could not figure out what the hell happened. That money became everything. It was not like that in the seventies. In the seventies, it’s how cool is your job? How cool is what you’re doing? If your job’s cooler than my job, you beat me.

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The Norwegian government is spearheading a significant initiative to prohibit students from having smartphones in schools. This move comes in the wake of compelling studies demonstrating the positive impact of removing these devices from students’ hands and allowing them to focus more on their learning. The results have been overwhelmingly positive; especially for young girls.

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Envy is inversely correlated with self-examination. The less you know yourself, the more you look to others to get an idea of your worth. But the more you delve into who you are, the less you seek from others, and the dissolution of envy begins.

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As debt increases it narrows the range of outcomes you can endure in life. Once you view it as narrowing what you can endure in a volatile world, you start to see it as a constraint on the asset that matters most: having options and flexibility.

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One of the most important skills of the future will be learning how to become indistractable. The root cause of human behavior is the desire to escape discomfort.  The truth is, we overuse video games, social media, and our cell phones not just for the pleasure they provide, but also because they free us from psychological discomfort. Distraction, then, is an unhealthy escape from bad feelings.

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Some ideas and techniques to help improve happiness including embracing the seasons of your life and meeting people more than halfway.

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More evidence that allowing kids to do many activities and play many sports, makes them more likely to be really great a one of them (and enjoy it a lot more). Caitlin Clark is the most recent high-profile example.

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There’s a sweet spot in most areas of life. If you already live a comfortable life, then choosing to make more money but live a worse daily life is a bad trade.

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When Raymond Dolphin became assistant principal of a middle school in Connecticut two years ago, it was clear to him that the kids were not all right. The problem was cellphones. So in December, Dolphin did something unusual: He banned them. The experiment has already generated profound and unexpected positive results.

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A few short stories on seat belts, Dunkirk, Notorious BIG, shorting housing, and astronauts.

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We’re moving from a world where people have only experienced growing housing prices, to one where they are likely to shrink. Over the last 75 years, demand for urban housing was driven by:

1. Higher population growth
2. More urbanization
3. More homes per person
4. Bigger homes

But supply ground to a halt horizontally and vertically:

1. Cities grew as much as they could horizontally and the edge of our car suburbs hit the Marchetti constant.
2. NIMBYs restricted building up, limiting supply

Now, we’re entering a world where all these trends are slowing down or reversing:

1. In demand:
   1. The population is shrinking or soon will
   2. Urbanization has reached its limits
   3. We have all the homes we need per person. That growth is stopping.6
   4. Homes keep getting bigger, but that trend is slowing every year
2. In supply:
   1. Remote work eliminates the need to live close to work, which means the entire world becomes potential housing land supply
   2. Building restrictions can’t get any tighter, and will likely be relaxed

Perfectionism in some areas often ends up as a net negative to overall life. You have a project, like a writing project. You can have an 80% (or even a 98%) solution in two months, or a 100% solution in a year. Time is life. Get it done and move onto the next project.

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To be ambitious is to imply that “you’re not there yet.” But suppose there is no gap in your mind. That you’re perfectly content with what you have. Has ambition ceased? If you want a certain state to persist, you will no longer have an ambition to accumulate, but rather an ambition to preserve. Being perfectly content with your current state means that you’ll desire what you have now, and wherever there is desire, there is ambition.

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You need to move beyond a rational return analysis to understand why poor people play the lottery. The average American living in the poorest 1% of zip codes spends $600 a year, or $50 per month, on lottery tickets. Assuming they bought tickets for 30 years, their total lottery spending would’ve been $18,000. If they had saved that money in cash instead, this means they could’ve had an extra $50 per month for 30 years in retirement.

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101 additional pieces of life advice from 72-year-old Kevin Kelly who recently wrote the book: “Excellent Advice For Living: Wisdom I Wish I Had Known Earlier.” A few favorites:

• There is a profound difference between thinking less of yourself (not useful) and thinking of yourself less (better).
• Forget trying to decide what your life’s destiny is. That’s too grand. Instead, just figure out what you should do in the next 2 years.
• Interview your parents while they are still alive. Keep asking questions while you record. You’ll learn amazing things. Or hire someone to make their story into an oral history, or documentary, or book. This will be a tremendous gift to them and to your family.
• Asking “what-if?” about your past is a waste of time; asking “what-if?” about your future is tremendously productive.
• Discover people whom you love doing “nothing” with and do nothing with them on a regular basis. The longer you can maintain those relationships, the longer you will live.
• Humility is mostly about being very honest about how much you owe to luck.

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Net share issuance (the amount of new stock being issued vs. how much companies are buying back) is shrinking at the fastest pace in 25 years:

A look at the Hedonic Treadmill and why our obsession with improvement is making us miserable. The instinct to improve our circumstances is a functional one in a society where resources are scarce. The problem arises when those who objectively already have enough — and ample time and money — are constantly marketed endless goods and opportunities.

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It is extremely difficult to stay in line with positive behavioral finance strategies because we’re wired to do the opposite. If it was easy it wouldn’t work because everyone would be doing it.

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The importance of being present and strategies on how to do it better including Forecasting Nostalgia: when this chapter is over, what will we have missed?

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Of the five major sports, the one with the greatest amount of luck involved in wins and losses is hockey. Luck plays a more important role when there are less chances to score.

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Car insurance premiums have been skyrocketing due to car and auto parts prices rising, drivers getting worse, and more vehicles being damaged by storms. Even with the increase in premiums, the payouts have been higher for private insurers the last few years.

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Great interview with Scott Galloway where he lightly discusses some of the topics of his new book, The Algebra Of Wealth, before going into a deeper, introspective conversation about his personal life in his 20s, 30s and 40s. He talks about the mistakes he made and the things that were worth it.

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It’s well understood how Fed rate hikes slow areas of the economy (real estate transactions, consumer loans and small business loans), but they also stimulate the economy in other ways. Bloomberg discussed it this week noting: the jump in benchmark rates from 0% to over 5% is providing Americans with a significant stream of income from their bond investments and savings accounts for the first time in two decades.

The government’s debt has ballooned to $35 trillion, double what it was just a decade ago. That means those higher interest rates it’s now paying on the debt translate into an additional $50 billion or so flowing into the pockets of American (and foreign) bond investors each month.

US households receive income on more than $13 trillion of short-term interest-bearing assets, almost triple the $5 trillion in consumer debt, excluding mortgages, that they have to pay interest on. At today’s rates, that translates to a net gain for households of some $400 billion a year.

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Bonds and stocks started moving together recently (stocks falling in price while bond interest rates rise meaning their underlying value falls). This is a new phenomenon for most investors (including me: I’m only 41). However, the graphic below shows that from 1940 to 2000 stocks and bonds moved together the majority of the time:

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A higher price to earnings ratio means a country’s stock market is more expensive. A lower number is less expensive. It’s the price you are paying for the earnings of the companies.

Average of Foreign Developed Markets: 20
Average of Foreign Emerging Markets: 15

United States: 33

Source: Meb Faber – Cambria Funds

Being Content vs. Being Complacent. Complacency is when you lack or deny awareness of potential dangers. It prevents growth. Contentment is feeling satisfied — at peace with what you have today. But it doesn’t stop growth. You can be content while still wanting to be better.

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How Much Is Luck Involved vs. How Much Is Repeatable? In business and investing, you want to learn the big lessons about why things behave the way they do without assuming the past is a direct guide to the future, because it’s not – most of the details are not repeatable. History is the study of change, ironically used as a map of the future.

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Self-reflection is pointless unless the person in the mirror is you: not the person you wish you were, but the flawed and fallible person you are. Instead of relying on all available information, we jump to sweeping conclusions from fragmentary data. We think vivid events are more frequent than they are. We overestimate our own experience and expertise. We anchor on irrelevant numbers, exaggerate our successes and forget our failures.

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Q&A With Ed Thorp on diet, exercise and managing risks in life. Ed wrote the original book on beating blackjack at casinos (“Beath The Dealer”), then created one of the most successful hedge funds in history (he recently wrote a great book about his life called “A Man For All Markets”).

I read a great book last month called “Fluke” that goes into extraordinary detail on how much luck (or flukes) impact everything in the world.

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Bill Perkins wrote a book called Die With Zero that has had an enormous impact on my life over the last few years. In this video interview he provides a great analogy on trying to get the order of things correct in your life:

Life is like Tetris…Let’s say you’re in heaven and you’re about to be born and God is like, “Here is the infinite bucket of experiences. Choose what you would like on your adventure.” And you’re like “Okay. This sex thing seems interesting…okay I wanna ride a bike. I wanna get a job. I wanna graduate. I think I wanna get married and have kids. Strip clubs? That seems interesting. I’ll throw in a couple of those.”

God goes, “Okay you can have them all on one condition—you have to get the order right.” So the people that do the marriage thing and have kids and then put the strip club afterwards don’t kind of get the high score. Because it interferes with it…or they put the heliskiing Mt. Kilimanjaro at 86. It’s kind of in the wrong spot, right?

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Insurance companies are taking pictures of our homes from the sky. Nearly every building in the country is being photographed, often without the owner’s knowledge. Companies are deploying drones, manned airplanes and high-altitude balloons to take images of properties. The array of photos is being sorted by computer models to spy out underwriting no-nos, such as damaged roof shingles, yard debris, overhanging tree branches and undeclared swimming pools or trampolines. The red-flagged images are providing insurers with ammunition for nonrenewal notices nationwide.

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Rangan Chatterjee speaks with Laurie Santos on The Happiness Lab Podcast, and they discuss why (and how) physicians like him are making happiness a priority for health.

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Why We Hate Waiting In Lines – It produces two conditions that humans hate: boredom and lack of autonomy. To compound these problems, time seems to slow down when you’re waiting for something.

Losses Are Much More Painful Than Gains: Examples from the financial markets, tennis matches and TV late-night hosts.

Global Price to Earnings ratio for United States stocks (incredibly expensive) vs. everything outside the United States (inexpensive). My portfolio (heavily weighted toward foreign stocks) is betting that the alligator jaws will close at some point in the future:

Some additional context to the chart above from Cliff Asness this week in Barron’s:

“Since the early 1990s, about 80% of the U.S. dominance has come from relative price/earnings multiple expansion versus non-U. S. stocks. People were paying less for the U.S. at the beginning, and now they are paying considerably more. Maybe that is justified; maybe things like U.S. tech dominance are real. But justified doesn’t mean repeatable. Justified at best means something isn’t going to reverse in a big way. Looking to the future, the case that the U.S. will have permanently higher equity returns is pretty untenable. Even if U.S. companies are worth it, they are priced as such.”

It’s not just foreign stocks that are cheap relative to U.S. stocks. The ratio of commodity prices to the S&P 500 is at historic lows:

A snapshot of how expensive U.S. stocks are relative to the most expensive moment in history (2000), second only to 1929:

Why Good Sleep Fixes Most Things & How To Sleep Better

Fun chart ….

50% of the US population lives in the blue counties (148)

50% of the US population lives in the orange counties (2,998) pic.twitter.com/OHI9kaHHtQ

— Jim Bianco (@biancoresearch) April 1, 2024

The Riddle Of Happiness: True happiness cannot be contingent upon any notion of satisfaction. Because to be satisfied is to imply an endpoint. A goal. And as the hedonic treadmill illustrates, once there is a goal, the logical conclusion is to create another chase to distract you. This distraction may keep you amused and busy, but once you’re faced with silence, you will be afraid of what you may feel. The only way you’re happy is when the thought of pursuing it ceases. When you’re content with whatever you’re doing, regardless of how it’s going or what the results may be. You are happy when there is no goal to hit because you understand that the pursuit of that goal creates the endpoint of satisfaction, which is never the answer.

32 Things Learned By Age 32, Including: Sympathy is a useless emotion. Feeling bad for someone does nothing for that person. It only makes you feel better about yourself. You know what is useful? A simple acknowledgment and a gesture of support. Something like, “I know you’re going through a hard time, and I’m thinking about you. Want to [insert activity that person enjoys] together?” The last thing somebody needs when they’re struggling is to comfort your discomfort for them.

The Female Happiness Paradox: 11 surveys of 167 countries and finds that always and everywhere, regardless of how the question is asked or what measure is used, women say they are more anxious, more depressed, more tired and more pessimistic than men. They are less likely than men to recall smiling or enjoying themselves the day before and are more likely to say they are stressed, lonely, restless and worried about their finances. Women typically report more chronic pain and poorer health and are more likely to take antidepressants. And yet: Women everywhere are still more likely than men to say they are happy and satisfied with their lives. In Gallup World Poll surveys of 167 countries between 2005 and 2021, women from Australia to Saudi Arabia typically rated their lives as high if not higher than men.

There Are Hidden Costs In Almost All Life Decisions – Work, Time, Relationships, Purchases & Trying To Impress Others

Since the pandemic, many of the most popular economic indicators with impeccable track records stopped working. Two of the most famous, the inverted yield curve and the leading economic index, have been flashing trouble for years while the overall economy has stayed strong.

One of the biggest reasons the economy continues to surprise is the massive amount of government spending/stimulus:

Just be a savage. These days, if you are even remotely a savage and you get out there and you grind hard and you want it badly enough, you can run by anyone. It is all out there for the taking, especially in this era of remote work. There has never been more opportunity out there than there is today. And for the companies and investors looking to excel and outperform? Start by finding these savages.

Not All Lifestyle Creep Is Bad – Spending More On Health Improvements and Buying Time

5 Insights From The Excellent New Book: “Look Again: The Power Of Noticing What Was Always There.” (The book is currently free to listen to if you have a Spotify subscription)

Half Of College Graduates Are Working Jobs That Don’t Use Their Degrees. More than any other factor analyzed—including race, gender and choice of university—what a person studies determines their odds of getting on a college-level career track. Internships are also critical.

The Jobs Market Is Signaling Trouble If You Look Deeper Into The Numbers – Podcast With Chris Puplava

Pensford Finds Similar Jobs Data Trouble In Their Letter This Week

The U.S. Produces More Crude Oil Than Any Country, Ever

We always hear how the United States stock market capitalization is concentrated in the Magnificent Seven, but other countries have a far higher concentration:

A.I. has already begun to increase productivity for companies, a trend that will likely continue as we move forward:

In the absence of strong convictions about what you want from life, you will always default to wanting more money. It’s the lowest common denominator of desire in a society with any semblance of upward mobility. The key to escaping this cycle is first establishing your priorities (family dynamics, geography, lifestyle, whatever), and then figuring out how to get there financially. Our problem is that we tend to let income determine desire.

The Anxious Generation: How The Great Rewiring Of Childhood Is Causing An Epidemic Of Mental Illness

40 Things Lessons At Age 40 (I Wish I Knew When I Was 20)

The Crypto Mania Is Back Again. A Possible Reason Why The Younger Generation Continues To Come Back: Financial Nihilism

Succumbing To Recency Bias Can Be Dangerous When Investing

GMO Discusses Global Markets, Climate Risks and Chemicals:

We’re heading toward a world where couples all meet online: