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:

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.