The Utility of the Shallow

Photo by David Edwards In the 2nd Dirty Harry movie, Magnum Force, Clint Eastwood opines, “A man’s got to know his limitations.” They say that in martial arts, you should ask yourself if you are Bruce Lee before attempting to kick over your head. When investing, you should ask yourself if you are Benjamin Graham before attempting to pick individual stocks. Am I Warren Buffet? No? Then I’ll invest in a Vanguard index mutual fund instead of some rocking castle in the sky hot-shot stock play. »

In Math We Trust

When the Savior was asked about taxes, he observed that a coin had Caesar’s image on it. When you look at US coinage, you will likely see a President’s profile, but you’ll also see “In God We Trust.” US currency is backed by the faith and credit of the US Federal Government. May it prove faithful in perpetuity and do nothing to make itself unworthy of our trust. Nevertheless, there are times when that trust wavers. »

Sounds Risky Bob

On the Newhart TV show there appeared two semi-regular characters who spoke in a thick New England accent. I clearly recall a scene where Newhart is describing a rather tame course of action in his deadpan voice which prompted one of the guys to say, “Idunno. Sounds Risky, Bob.” I’ve also heard a lot of personal finance guys bitterly complain about Dave Ramsey and how his advice does not make sense mathematically. »

Safe Variable Rate Loans

The only safe loan is the one you don’t make. If you encounter me on the street and ask, “How you doing?” I will invariably answer, “Better than I deserve.” And if you have any familiarity with Dave Ramsey’s radio program, you’ve heard that phrase before. I stole “Better than I deserve” from him decades ago. He can afford it, because his net worth is much, much greater than mine. Besides, there’s no law against stealing, “Better than I deserve. »

High Wire Act

Perhaps you have seen circus acts where the death-defying performer walks a tightrope high above the crowd. He succeeds by maintaining his balance. Balance is important in more than just this context. When I started learning how to manage my investments I learned about “diversifying” one’s assets and then I heard about “balancing” a diversified portfolio. Diversification is the long word for “thou shalt not put all your eggs in one basket. »