We Are Living in the Midst of One of the Biggest Bond Bubbles in History

Today, I was sitting at the dining room table, drinking a cup of coffee and wearing my Brooks Brothers pajamas watching the stock market skyrocket when it occurred to me that, given the secret project and some other things going on at the business, I want to build some cash and bond reserves at one [...]

from Joshua Kennon

A Hedge Fund vs. a Mutual Fund

In the next 2-5 years, depending upon what happens at the private businesses we own, I am seriously considering launching either a hedge fund or a mutual fund.  Both have significant advantages and disadvantages. A Hedge Fund The Pros: With a hedge fund, I could do almost anything I can do now in private business.  [...]

from Joshua Kennon

Think Like a Spider Web, Not an Organizational Chart

Here is the best thing I heard all day … Life is not an organization chart. Life is more like a spider’s web. Things happen in strange ways. – Ross Perot There is a lot of truth in this. You cannot think lineally about your life or business. You need to think in three-dimensions. This [...]

from Joshua Kennon

One of the Mansions In Charlie Munger’s Secret “Mungerville” Up for Sale

Given that I wrote about Charlie Munger so much this week (re-reading part of his biography caused him to be on my mind), I thought this was interesting … Years ago, through a tiny property subsidiary called MS Properties (or something along those lines), that is a subsidiary of Wesco Financial Corporation, that is a [...]

from Joshua Kennon

Are You an Average American Worker?

A Word on the “Average” Worker The universal law of mathematics is that half of all citizens must be above average and half must be below average.  (Our job is to try and increase that average over time so that someone who is “average” today is richer than someone who was “average” 100 years ago). [...]

from Joshua Kennon

The Secret World of Brooks Brothers

Before I “arrived” as they say, I had no idea how different clothes shopping was for men once they became successful.  Honestly, I never thought much about it but the assumption was that in terms of logistics, it would be just like shopping at Wal-Mart only with better surroundings, better service, higher quality and higher [...]

from Joshua Kennon

Stock Market Finishes with Worst August Since 2001

The stock market crash this month was the worst August since 2001.  At times, it was, to paraphrase Buffett, “like a bird flying into the middle of a badminton match.” The long-term investment accounts were unscathed (there, in fact, we love falling prices) but the speculation accounts took a beating.  For now, it’s all on [...]

from Joshua Kennon

A Reader Question About the Trade Deficit

A message from a reader named Adam about the trade deficits.  I responded in a five-part essay on How to Solve the Trade Deficit. Joshua, I follow your personal blog, and find your articles very informative, it’s a great reference, and you inspire me, as I feel I am very similar to you, minus the [...]

from Joshua Kennon

A $1,000,000 Municipal Bond Dilemma

Those of you who follow my writings at About.com, a division of The New York Times, know that I’ve written about municipal bonds at the Investing for Beginners site including one article that detailed some ways to help you determine if a specific municipal bond was “safe”. At the wedding this weekend, I was discussing [...]

from Joshua Kennon

The Hindenburg Omen and the Stock Market

The stock market is all lit up talking about the dreaded Hindenburg Omen, which sometimes (though not always) predicts a major stock market crash. Listen to me: All of this trash is nonsense.  Things like the Hindenberg Omen and other market forecasts are merely attempts to look at symptoms rather than causes.  It would be [...]

from Joshua Kennon

Professor Richard Wolff Says Capitalism Is To Blame … for Everything

Amherst professor Richard Wolff, is arguing that capitalism is a failure because events like the housing crisis keep occurring with some regularity.  Evil banks are “forcing debt” on more Americans who are downing under their bills.  He proposes that we should create low cost “community owned” housing for everyone. Yes, Richard, because American Express and [...]

from Joshua Kennon

How to Avoid Financial Stress

I was reading through the comments on an article about investing over at Yahoo Finance and a lot of people were whining about the fact that it is impossible to save money.  Only those who inherit their money can be rich (which you all already know is false based on the evidence). A gentleman named [...]

from Joshua Kennon

The House of Creed Is the Perfect Family Business

This is cross-posted from the Investing for Beginners site at About.com, a division of The New York Times.  I wanted to point it out to the readers here and tell you to head over there and check it out because I had been writing so much about Creed perfume, cologne, and fragrance products the past [...]

from Joshua Kennon

Ozzy and Sharon Osbourne Certainly Know Their Real Estate

When it comes to real estate, business acumen, and interior decor, Ozzy and Sharon Osbourne have my admiration.  Not only are their properties flawless in appearance, they use them as cash generators. According to one of my favorite blogs, Mr. and Mrs. Osbourne purchased this 4,500 square foot, 5 bedroom, 5 bathroom beachfront property in [...]

from Joshua Kennon

Limited Liability Companies LLCs vs. Limited Partnerships LPs

I am in the process of publishing several dozen new investing articles about limited liability companies and limited partnerships over at About.com, a division of The New York Times. The idea came to me a few weeks ago when a reader wrote and pointed out that millions upon millions of people will never own a [...]

from Joshua Kennon

Mail Bag – How Does Someone Start Creating Passive Income?

Among the thousands of emails and messages I receive regularly, I came across one today that was sent to me on May 17th by Cale P. Here is the question that was posed: I’m a pretty talented IT professional with great salary and a standard quality of living. I’ve known that I won’t be in [...]

from Joshua Kennon

The Real National Debt Figures

The chart is incredibly deceptive because it doesn’t factor in that we are running deficits. Thus, the following figures are unsustainable. We bled so much red ink last year that it shows interest on the national debt at only 5% of the budget, yet according to the United States Treasury Department, we paid $383,071,060,815.42 in [...]

from Joshua Kennon

Health Care Reform Taxes Will Hit Top 1% of Households

I don’t think there is any reasonable chance health care will be overturned as unconstitutional because it is written in such a way that you aren’t technically required to buy health insurance, you will just be subject to a special excise tax if you don’t. A lot of very, very expensive lawyers made sure the [...]

from Joshua Kennon

The Joy of Cash Dividends

Over the years, I’ve written a lot about dividends on the Investing for Beginners site at About.com.  In fact, over the past few years it has been one of my absolute favorite topics to cover because through the Great Recession of 2007-2009, those who owned a collection of high quality dividends stocks were better able [...]

from Joshua Kennon

The Housing Crisis Isn’t All Bad …

As Warren Buffett pointed out in this year’s letter to Berkshire Hathaway shareholders, for every house that falls in value and pushes one family into bankruptcy, another American family benefits from the lower prices as new households are created due to the younger generation graduating from college, settling down, and moving out of their parents’ [...]

from Joshua Kennon

The Kennon Retirement Insurance Plan

One of the Things That Helped Me … From time to time, you may come across reference to my “stupidity” insurance or my “reserve” fund.  I’ve had a bunch of readers write me over the years and ask about various comments I’ve made so I thought it might be useful to explain it.  My parents, [...]

from Joshua Kennon

People Who Are Drowning in Student Loan Debt

Victims of the Student Loan Industry or Irresponsible Borrowers? I was reading a site called Student Loan Justice as well as a piece at the Huffington Post where people are talking about their “overwhelming” student loan debt that is – wait for it – $15,000 or $30,000.  Basically, less than the value of a car.  [...]

from Joshua Kennon

What The Rich Really Collect

from Joshua Kennon

Common Misconceptions About Dollar Cost Averaging

It is a common misconception that dollar cost averaging is merely the regular saving of money through automatic investment.  Technically, this is not dollar cost averaging, although it closely resembles it.  Instead, dollar cost averaging is the regular investing of a fixed amount of money as opposed to putting it in to the market in [...]

from Joshua Kennon

Asset Positioning Asset Allocation Strategy

Did you know there is a unique tax strategy that can help improve your asset allocation investing by keeping more money in your pocket? It’s called asset positioning and it can be practiced by virtually anyone with investments.  I once wrote about asset positioning over at Investing for Beginners at About.com, a division of The [...]

from Joshua Kennon

Asset Allocation Rebalancing

One of the cornerstones of asset allocation is the concept of rebalancing.  Done correctly, rebalancing forces you to buy certain investments when they are undervalued (cheap) and sell when they are overvalued (expensive).  In effect, it makes the owner of the portfolio a value investor without the need to analyze individual companies.  It can even [...]

from Joshua Kennon

Tactical Asset Allocation and Your Portfolio

Tactical Asset Allocation vs. Value Investing The difference between tactical asset allocation portfolio management and value investing is that tactical asset allocation only seeks to find undervalued asset classes – not individual securities or investments. That is important.  An investor that is using a tactical asset allocation approach may look at stocks, bonds, real estate, [...]

from Joshua Kennon

Real Estate Asset Allocation 101

When you’re ready to add the real estate asset class to your investing portfolio, your asset allocation decisions aren’t done.  You have a smorgasbord of options, including REITs, apartment buildings, storage units, parking garages, farm land, strip malls, office buildings, and rental houses, just to name a few.  You can even invest in mixed asset [...]

from Joshua Kennon

Asset Allocation Basics 101

Asset allocation is one of the most important concepts you must learn as an investor.  By practicing it, you can balance your portfolio against adverse market conditions, keeping more capital in your account so you can take advantage of the market crashes that will happen as an inevitable result of human nature. That is why [...]

from Joshua Kennon

What Asset Classes Should I Consider for My Asset Allocation Portfolio?

When you are ready to begin investing with a disciplined asset allocation plan, you may wonder which asset classes are appropriate for your strategy.  According to the Securities and Exchange Commission, the best way to determine the best asset class is to consider two factors – your time horizon and your risk profile. Your Time [...]

from Joshua Kennon

The Talmud Asset Allocation Model Portfolio

Asset allocation is a cornerstone of modern portfolio theory, yet it’s as old as mankind itself.  In fact, the first known asset allocation model can be found in the Talmud.  Even more interestingly, those who followed the ancient investing prescription actually beat the market over the past decade.  Is the Talmud asset allocation model right [...]

from Joshua Kennon

Passive Income Asset Allocation Model Portfolio

Asset allocation models designed to generate passive income for investors remain among the most popular of all time because everyone wants to be able to live off their money.  Whether you are retired and need to augment your Social Security income, or you are wealthy and want to generate passive income without touching your principal, [...]

from Joshua Kennon

Balanced Asset Allocation Model Portfolio

A balanced asset allocation model portfolio is one designed to generate a steady combination of growth, income, and capital preservation.  The intention is to create a combination of asset classes that results in lower overall volatility so the investor doesn’t need to worry about wild market fluctuations because the holdings in their account mitigate each [...]

from Joshua Kennon

Growth Asset Allocation Model Portfolio

For young investors in their 20s, 30s, and even 40s, with decades until retirement, steady jobs, and plenty of savings, an aggressive growth asset allocation model portfolio may be the best choice.  The caveat: If the investor cannot handle volatility, watching their assets drop 50% on paper one year or skyrocket the next, they should [...]

from Joshua Kennon

A Discussion on Pension Costs

It’s nearly 4 in the morning and I’m up reading political blogs; happened to come across http://cognidissidence.blogspot.com/ and enjoyed reading it. This particular entry is way off base from a financial perspective and since the author seems to be working to expose problems in government, I thought I’d take the time to explain why if [...]

from Joshua Kennon

How to Make Money in Fable 2 – Or, How I Made My Fable 2 Character a Millionaire in a Few Days Without Cheating

It’s remarkable that the same concepts that allowed me to be effectively retired by my mid-twenties allows me to frequently become rich in video games. That’s the nature of compounding.  It is a law, exactly like gravity. This weekend, Ashly and Ian drove in from Columbus to visit – they are thinking about relocating to [...]

from Joshua Kennon

The Psychology of Human Misjudgment by Charlie Munger

By Charlie Munger (Warren Buffett’s partner at Berkshire Hathaway) Speech at Harvard Law School (1995) Transcription of The Psychology of Human Misjudgment, comments [in brackets] by Whitney Tilson.  Note from Joshua Kennon: I’ve written a lot about Charlie Munger over the years, especially the influence he has had on my life and how we run [...]

from Joshua Kennon