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Valuing a Piece of Americana

Baseball cards are part of Americana. The slotted binders, stats, and bike rides to shops evoke nostalgia too. The investment merit of cards fit is another question. An index of the rarest of cards may have outperformed the S&P 500 by 2.3x over the last 10 years but that's a small niche with gated access. Though investment returns on cards and collectibles are hard to find details on, they lag bonds, stocks, and real estate. To sell cards is to accept the current market value. An extra dos ...

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Price and Value

The tension between price and value is familiar. We want the $14k Ford Fiesta price but the Tesla Model S product. We usually get what we pay for. Employers promote generous healthcare benefits, ones with little advertised friction (e.g., low deductibles). Generosity is vague. Is a $1,500 deductible good or bad? Our only guide is usually our past experience, which is not the purest of benchmarks. There are also premium contributions we make through payroll. The biggest expense in a given year ...

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Arbitrage and the Advice We Give

In March the gap between London and New York gold prices jumped to $60 per ounce, 40 times the typical spread of $1.50 per ounce. In times of fear, investors prefer to have their gold in New York. These extreme arbitragearbitrage: to simultaneously buy low and sell high; everyone's dream. opportunities have short windows. Arbitrage is one of my favorite words and economic ideas. Other dislocations in prices are less pronounced but more enduring. Irish playwright George Bernard Shaw said that "a ...

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Read The Footnotes

70% of people don't read beyond the headlines. I don't know if this is true or where I saw it but it feels right. Footnote reading has got to be a rare sport. Perhaps one in a hundred do that. Some deep understanding requires footnote experience. We're overloaded with a world run by clicks and giggles, one that plays with our emotions so footnotes get lost and can go deepDavid Foster Wallace: And the world will not discourage you from operating on your default-settings, because the world of men ...

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When Simple Financial Products Win

Index investing is one of the greatest growth stories in finance. Indexing is a form of passive investing, a simple strategy--basically long-term autopilot. Why try to beat the S&P 500 when you can match it? Even Warren Buffett recommends it for others. Today, passive strategies control trillions of dollars. A segment of passive, target-date funds (TDFs), a grandchild of John Bogle's indexing boom, are ballooning, and now stand at over $1.4Thttps://www.investmentnews.com/target-date-sales-r ...