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Showing posts from March, 2017

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Clearly, Not Everyone Is Getting Rich Off The Stock Market

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Well, the NY Fed was out today with its Quarterly Report on Household Debt and Credit for Q4 2017. Clearly, Americans are in a lot of debt. Take a look.


Just a couple of quick hits from the report. Total U.S. household debt rose $193 billion in the 4th quarter, to a new all-time peak of $13.15 trillion. That's 17.9% above the most recent trough in Q2 2013. Broken down by segment, what do you suppose was the largest gain in percentage terms? Credit cards, with a 3.2% increase. In the picture above, the widening gap represented by the red arrows reflects the fact that non-housing debt is rising at a faster pace than housing debt.

Here's what's troubling about that. Below is a picture of the stock market, as represented by the S&P 500 index, over that same period; from the most recent credit trough in Q2 2013 to the end of 2017.


And thus, the title of this article. Over that period, the S&P 500 index rose by 75%; from roughly 1,600 to 2,800. Apparently, however, the r…

On Warren Buffett, ETFs, And The Democratization Of Investing

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I’m an average guy. When I travel to New York City, I stay at the Affinia Shelburne in Murray Hill. I usually pick up breakfast at the bagel shop just down the street, or the Pret A Manger at 41st and Lex. Maybe I’ll grab a little lunch at the original Shake Shack in Madison Square Park. And the last time I visited, I had a great $12 bowl of Tokyo Chicken at Momosan Ramen & Sake, Chef Morimoto’s cool ramen bar at 342 Lexington.

I’ve never been able to stay at the Plaza Hotel, nor dine at Per Se or Masa. As I say, I’m an average guy. Not poor, by any means. But not wealthy enough to engage in pursuits where money is no object.
Perhaps that is why a particular point that Warren Buffett made in his 2016 Shareholder Letter, and the way he explained it, really caught my attention. You see, for about two years now, I have been writing on the topic of ETFs. As I have done so, I have focused on the issue of cost; of keeping your expenses low and putting as much as possible of the return…