Happy Friday! There are more good news articles, commentaries, and analyst reports on the Web every week than anyone could read in a month. Here are eight fascinating ones I read this week.
Josh Brown puts it all in perspective:
If you had twenty five years left to live, how much time would you spend worrying about the daily ups and downs of the stock market?
If you had twenty years left to live, how much time would you spend trying to time the stock markets and the economy and other things that are both unpredictable and completely out of your control?
If you had fifteen years left to live, how much time would you spend trying to buy or sell a specific stock at the perfect price?
If you had ten years left to live, how much time would you devote to comparing your monthly investment returns against the returns of others?
If you had five years left to live, how much of it would you spend obsessing over financial news and its unforeseeable impact on your portfolio?
Expanding its Internet services ever further, Google has teamed up with Starbucks to outfit 7,000 of its US coffee shops with faster Wi-Fi connections. The deal sees Google replace AT&T as the official Internet provider in stores, offering customers Internet speeds up to ten times faster than before. For Starbucks stores in Google Fiber-enabled areas (including Kansas, Utah, and Austin), the search giant will provide a connection that is up to 100 times faster.
Howard Lindzon embraces messiness:
I don't think things are neat. I like neat and I focus as much as I can on neat, but I know messy is around the corner.
I also don't believe scale is easy to spot, so I don't go around all day looking for it or chasing it. I invest in people (always messy) and I invest in patterns and the expected behavior of other people (messy squared).
Embrace some messiness. Roll your sleeves up and do some things today and tomorrow that don't scale. You will be amazed over time how neat and scalable and profitable your life can get over time.
Same ol' story at the rating agencies:
Five years after inflated credit ratings helped touch off the financial crisis, the nation's largest ratings agency, Standard & Poor's, is winning business again by offering more favorable ratings. S.& P. has been giving higher grades than its big rivals to certain mortgage-backed securities just as Wall Street is eagerly trying to revive the market for these investments.
Tren Griffin writes on a dozen things he learned from George Soros, including:
"Money is made by discounting the obvious and betting on the unexpected."
"I only go to work on the days that make sense to go to work. And I really do something on that day."
"If investing is entertaining, if you're having fun, you're probably not making any money. Good investing is boring."
"Market prices are always wrong in the sense that they present a biased view of the future."
Bruce Bartlett writes on the mortgage interest deduction:
Contrary to popular belief, the mortgage interest deduction wasn't adopted to encourage home ownership. The original income tax enacted in 1913 allowed a deduction for all interest on the theory that it was largely business-oriented. According to Dennis Ventry of the University of California, Davis, School of Law, only a third of homeowners carried a mortgage in 1910.
It should also be noted that the personal exemption was $3,000 in 1913, equivalent to $70,000 today. Consequently, very few taxpayers could deduct any interest at all. Only 357,000 tax returns were filed in a population of 97 million.
"We innovate by starting with the customer and working backwards," he says. "That becomes the touchstone for how we invent." Pushing the publishing industry to make books available electronically was a customer-friendly proposition: Readers got instant gratification at lower prices. Amazon Prime, the company's addictively popular all-you-can-eat delivery offering, eliminates friction; if you've already paid for unlimited shipping, then you order what you want, when you want, in the quantities you want. Amazon Web Services, the company's newest big division, offers business customers the same sophisticated online infrastructure technology that Amazon has developed for itself.
Here's a great old video with the late Milton Friedman on capitalism:
Enjoy your weekend.