Great Advice From Bill Bernstein

This week I am attending the Arizona Wildfire & Incident Management Academy. This is something I have been involved with either as a student or part of the staff for almost every year the academy has existed which goes back 2003. This year I am taking Fire Line Medical Provider which as the name implies is EMT/Paramedic related (I am an EMT). If you’ve been reading this site for a while you may recall that I regularly tie the problem solving needed in the investment world into the problem solving needed in the fire science world and maybe those resonate and maybe not but in my class yesterday we spent about two hours on what the curriculum called human factors but were the same cognitive errors that can hold back investors including, anchoring, confirmation bias and recency bias. Funny. Anywho, to today’s post at Alpha Baskets; Investing, at all points in the cycle, is about patience. Whatever asset allocation and investment strategy you chose, whether on your own or with an advisor, came with no emotion. It was the product of a well-reasoned conversation and process. Occasionally, an allocation strategy plan needs to be amended, like if you’re terrified all the way up (some people are, it’s ok). And obviously for certain life events there will be changes, but that is different than watching the market skyrocket and saying to yourself, or your advisor, why don’t I have more equity exposure? Please click through to read the entire...

NASDAQ 5000, And It Lasted For Almost 24 Hours!

The Weekly Market Update was posted at Alpha Baskets and includes the following; The yield on the US Ten Year Treasury Note increased by 24 basis points last week to 2.24% after going up 13 basis points the week before with half of that gain coming on the heels of Friday’s jobs report. While yields in the US moved swiftly higher last week, the European bond markets we regularly follow here had a week with no discernable pattern. The German bund yield went up six basis points to yield 0.39% and five year German paper still has a negative yield. Yields in France also went up as the OAT now yields 0.69%. The Swiss ten year swung back into the negative territory at -0.02%. Spain upticked to 1.30% and Italy held steady at 1.33% and now 91 basis points less than its US counterpart. Barron’s suggested that the European Central Bank’s commencement of its asset purchase program today could mean that yields in negative territory stay there for an extended period because of the ECB’s buying demand. Please click through to read the entire...

Arizona Wildfire Academy 2015

  This year’s Arizona Wildfire Academy is happening all this week here in Prescott. There are a few of these in the Mountain Time Zone but I get the sense that this is one of the big ones if not the biggest. I’ve attended the academy as a student for many years going back to the first one in 2003, I worked at last year’s academy in logistics and this year am a student again in the Fireline Medic class which starts on Tuesday. Over the weekend I stumbled across a fascinating article about a 21 year old pitching prospect for the Blue Jays who is likely to get the 5th starter’s spot in the rotation. His name is Daniel Norris and the short version would be to say he is a free spirit bordering on eccentric but that isn’t a complete description. For spring training he his living in his van in the Walmart parking lot, eating a very specialized diet, not partying at night with the other guys his age but instead he hangs out at the beach, he writes and does some other hippie things. He got a huge signing bonus when he graduated high school but he only pays himself $800/month because he says he does a little better when he feels poor. In the off-season he’s had jobs at stores, did a low budget hiking trip in Nicaragua and other things not typical of a college aged kid regardless of how much he has in the bank. He does all this to be “happy and balanced and continuing to be me. It might be unconventional,...

Understanding Deflation, Negative Yields And Gold

My latest for Alpha Baskets looks at the impact of deflation on gold and other markets. From the post; We see this in the shockingly low bond yields in Europe. The ten year yields for sovereign debt from all of the PIIGS countries (remember that term?) is lower than the US Ten Year Treasury Note and has been for quite a while. Five year sovereign debt in Germany, Austria, the Netherlands and Finland are all negative. Non euro countries like Denmark, Sweden and Switzerland also have negative yields at various points on their respective curves. Please click through to read the entire...

The Benefits Of Tiny Withdrawal Rates

My latest post at Alpha Baskets explores the practical benefit from tiny living, namely financial flexibility and potentially less investment risk from living below your means. From the post; The role that luck plays here cannot be minimized and by luck I mean the timing of when to start your idea of retirement. The person who retired on December 31st 2006 needing 4.5% was likely forced to make some very uncomfortable decisions (while everyone remembers what happened in 2008, the market was flat in 2007 so in this scenario they took their 4.5%, got little to no growth and then the market imploded). You may be lucky enough to hit your number at a bear market low or you may not, it is luck and beyond your control. Please click through to read the entire...