8 Fascinating Reads

Good reads, short quotes.

Jul 25, 2014 at 11:00AM

Here are 8 great articles and pictures I read this week. 

Expectations

An anonymous writer says he made $15 million by the time he was 30 and it wasn't even all that great:

Being rich does come with some downsides, though. The first thing you are thinking reading that, is, "cry me a river". That is one of the downsides. You are not allowed to complain about anything, ever. Since most people imagine being rich as nirvana, you are no longer allowed to have any human needs or frustrations in the public eye. Yet, you are still a human being, but most people don't treat you like one.

Smart money

Ben Carlson shows the returns and volatility of the world's largest college endowments vs. a simple index fund. It's sad: 

Bs

Pay for performance-ish 

Vox plotted CEO pay against shareholder returns. There's basically no correlation at all: 

Screen

Talent

ESPN writes about one of Lebron James' secrets: He has a wicked memory: 

  • One of LeBron's childhood friends says that when you play the Madden videogame against LeBron, you can't be the same team twice because he'll remember which plays you ran.
  • In February of 2014, after making a game-winning shot in Golden State, he recalled a game-winning shot he made against the Warriors in 2009, noting small differences: "That one was probably about six feet closer to the baseline and inside the 3-point arc. It was over Ronny Turiaf, I stepped back on him but I crossed him over first and got him on his heels. I'm sure of it. It was down the sideline a few feet. It was a side out-of-bounds play; this one we brought up."
  • During a game against the Pacers, he suggested that they run a certain play "like we did in Game 3 against Dallas" — a three-year-old game.
  • He remembers the jersey number Kevin Ollie wore for the Cavaliers in 2003-04.
Stability
Here's an amazing story about hacking the markets:
Hackers broke into Nasdaq's network four years ago with custom-made malware that had the potential to spy and steal data. But it could also cause digital destruction, potentially disrupting Nasdaq's computer system.

It's still unclear who the attackers were. A federal official briefed on the investigation said the FBI has not developed enough evidence to conclude a foreign government was responsible behind the hack.

Misbehavior

The latest Dalbar study shows how bad the average investor is at timing the market:

  1. Over the past 20 years, "equity fund" investors achieved an average 5.02% annualized return, which is 4.2% less than the 9.22% that he/she could have achieved by simply investing funds in an S&P500 index-tracking fund. This gap expanded in 2013, for only the third time in ten years.
  2. Over the bull market of the past three years, "equity fund" investors achieved only an average 10.87% annual return, lagging the average annual S&P500 return (16.18%) by 5.31%.
  3. Investors in "asset allocation funds" did even more poorly. Their 20-year average annual return was only 2.53%, lagging the S&P500 index (9.22% per annum) by 6.69% per annum.
  4. Investors in "fixed income funds" did more poorly still. Their 20-year average annual return was an abysmal 0.71%, fully 8.51% less than the S&P500 index, and 5.03% per annum less than the Barclay's Aggregate Bond Index (5.74% per annum) over this time.
  5. Not surprisingly, investors show little evidence of skill in "market timing." The DALBAR report notes that in the six best months of 2013, when the market was up sharply, there was no evidence that individual investors moved more than average amounts into equity funds.
Sad because it's true
Andy Borowitz sarcastically writes about decline:

MINNEAPOLIS -- Historians studying archival photographs from four decades ago have come to the conclusion that the U.S. must have believed in science at some point.

According to the historian Davis Logsdon, who has been sifting through mounds of photographic evidence at the University of Minnesota, the nation apparently once held the view that investing in science and even math could yield accomplishments that would be a source of national pride.

Legend

Here's a fascinating video about Benjamin Graham: 

Have a great weekend. 

Risk-free for 30 days: 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.

1 Key Step to Get Rich

Our mission at The Motley Fool is to help the world invest better. Whether that’s helping people overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we can help.

Feb 1, 2016 at 4:54PM

To be perfectly clear, this is not a get-rich action that my Foolish colleagues and I came up with. But we wouldn't argue with the approach.

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.

"The Motley Fool aims to build a strong investment community, which it does by providing a variety of resources: the website, books, a newspaper column, a radio [show], and [newsletters]," wrote (the clearly insightful and talented) money reporter Kathleen Elkins. "This site has something for every type of investor, from basic lessons for beginners to investing commentary on mutual funds, stock sectors, and value for the more advanced."

Our mission at The Motley Fool is to help the world invest better, so it's nice to receive that kind of recognition. It lets us know we're doing our job.

Whether that's helping the entirely uninitiated overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we want to provide our readers with a boost to the next step on their journey to financial independence.

Articles and beyond

As Business Insider wrote, there are a number of resources available from the Fool for investors of all levels and styles.

In addition to the dozens of free articles we publish every day on our website, I want to highlight two must-see spots in your tour of fool.com.

For the beginning investor

Investing can seem like a Big Deal to those who have yet to buy their first stock. Many investment professionals try to infuse the conversation with jargon in order to deter individual investors from tackling it on their own (and to justify their often sky-high fees).

But the individual investor can beat the market. The real secret to investing is that it doesn't take tons of money, endless hours, or super-secret formulas that only experts possess.

That's why we created a best-selling guide that walks investors-to-be through everything they need to know to get started. And because we're so dedicated to our mission, we've made that available for free.

If you're just starting out (or want to help out someone who is), go to www.fool.com/beginners, drop in your email address, and you'll be able to instantly access the quick-read guide ... for free.

For the listener

Whether it's on the stationary exercise bike or during my daily commute, I spend a lot of time going nowhere. But I've found a way to make that time benefit me.

The Motley Fool offers five podcasts that I refer to as "binge-worthy financial information."

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. It's also featured on several dozen 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 ... and I don't say that simply because the hosts all sit within a Nerf-gun shot of my desk. Rule Breaker Investing and Answers contain timeless advice, so you might want to go back to the beginning with those. The other three take their cues from the market, so you'll want to listen to the most recent first. All are available at www.fool.com/podcasts.

But wait, there's more

The book and the podcasts – both free ... both awesome – also come with an ongoing benefit. If you download the book, or if you enter your email address in the magical box at the podcasts page, you'll get ongoing market coverage sent straight to your inbox.

Investor Insights is valuable and enjoyable coverage of everything from macroeconomic events to investing strategies to our analyst's travels around the world to find the next big thing. Also free.

Get the book. Listen to a podcast. Sign up for Investor Insights. I'm not saying that any of those things will make you rich ... but Business Insider seems to think so.


Compare Brokers