8 Fascinating Reads

Good reads, short quotes.

Jul 18, 2014 at 9:03AM

Here are great reads from the week. 

Expectations

Ben Carlson shares a great quote from Richard Peterson. This is a perfect parallel to investing:

Researchers examined the stress responses of two groups of rats after they were subjected to painful electric shocks. Group 1 received painful electric shocks 10 times per hour, while group 2 was shocked 50 times per hour. The second day, all rats were shocked 25 times per hour. At the end of the second day, rats from group 1 (who experienced an increase in shock rate) had elevated blood pressure (a physical sign of stress). Rats from the second groups (who experienced a decrease in shock rate) had normal blood pressure.

Revisions 

Old estimates showed the national debt spiraling out of control due to forecasts of runaway health care costs. But now this is happening

Over the last four years, health care spending has grown at a historically slow rate. Economists credit the Affordable Care Act in part, as well as other reforms ... In a startling but continuing reversal of projection, the CBO said Tuesday that the federal government would spend about $250 billion less on major federal health care programs than it had forecast in 2010, the year the Affordable Care Act was signed into law. 

Budget forecasting is always hard, but this slowdown isn't just a forecast. It's happening now. 

Eating someone else's cooking

Most mutual fund managers don't have any personal money in the funds they run:

Using data from Morningstar, they find that almost half the funds tracked were led by a manager with no money invested at all. This sorry bunch may think they're good, and their marketing materials presumably make the case, but by investing their own money elsewhere they tell you what they really think.

And of the 7,700 funds tracked by Morningstar, only 910 had a personal investment by the manager of at least $1 million. 

Normalcy

California mortgage default notices are back to pretty normal levels:

Dqnodsq

People hate themselves

Most people would rather be shocked than left alone with their own thoughts:

In a study published in Science Thursday on the ability of people to let their minds "wander" — that is, for them to sit and do nothing but think — researchers found that about a quarter of women and two-thirds of men chose electric shocks over their own company.

Market timing

Phil Pearlman says everyone needs to relax when trying to call a market top:

Two things here you need to know...

First, if everyone is so busy looking for the event that will mark the very top of some market's bubble, it says much more about sentiment than the meaning of any event.

And second, while sure there is always an event or two that become symbolic of a top, those events are chosen randomly to a degree and are only accessible in hindsight.

Mistakes

Cullen Roche says everyone is dumb but only the smart ones learn from it:

Now, most people hate being wrong.  Yeah, it makes you look silly, but it doesn't have to make you look permanently silly.

After all, there's a lot of truth in the saying that there are no mistakes, only lessons.  I think that's basically right.  And in the world of finance you're 100% guaranteed to make mistakes.  100% of us will make mistakes in this business.  There's no getting around it.  But only a minority will really embrace those mistakes of fiercely attempt to learn from them in the proper way.

Customer service

A guy tried to cancel his Comcast service and recorded the call. What happened next is nothing short of amazing. Take a listen: 

Enjoy your weekend. 

Free 30-day trial: The Motley Fool's flagship service
Tom and David Gardner founded The Motley Fool over 20 years ago with the goal of helping the world invest...better. Their flagship service, Stock Advisor, has helped thousands of investors take control of their financial lives and beat the market. Click here to sign up today.

Contact Morgan Housel at mhousel@fool.com. The Motley Fool has a disclosure policy.

Money to your ears - A great FREE investing resource for you

The best way to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as “binge-worthy finance.”

Feb 1, 2016 at 5:03PM

Whether we're in the midst of earnings season or riding out the market's lulls, you want to know the best strategies for your money.

And you'll want to go beyond the hype of screaming TV personalities, fear-mongering ads, and "analysis" from people who might have your email address ... but no track record of success.

In short, you want a voice of reason you can count on.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich," rated The Motley Fool as the #1 place online to get smarter about investing.

And one of the easiest, most enjoyable, most valuable ways to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as "binge-worthy finance."

Whether you make it part of your daily commute or you save up and listen to a handful of episodes for your 50-mile bike rides or long soaks in a bubble bath (or both!), the podcasts make sense of your money.

And unlike so many who want to make the subjects of personal finance and investing complicated and scary, our podcasts are clear, insightful, and (yes, it's true) fun.

Our free suite of podcasts

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. The show is also heard weekly on dozens of radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable. Rule Breaker Investing and Answers are timeless, so it's worth going back to and listening from the very start; the other three are focused more on today's events, so listen to the most recent first.

All are available for free at www.fool.com/podcasts.

If you're looking for a friendly voice ... with great advice on how to make the most of your money ... from a business with a lengthy track record of success ... in clear, compelling language ... I encourage you to give a listen to our free podcasts.

Head to www.fool.com/podcasts, give them a spin, and you can subscribe there (at iTunes, Stitcher, or our other partners) if you want to receive them regularly.

It's money to your ears.

 


Compare Brokers