Picture Credit: Infoletta Hambach || I suppose Euros are manna from somewhere, though not Heaven. After all, they appear out of nowhere [ECB], and there is no guarantee that any government will receive them in the long run. “The lure of free money brings out the worst economic behavior in people.”David Merkel, often said at Aleph Blog Where is there “free” or at least “inexpensive” money? Jobs that are overly compensated compared to the skills needed.Demanding that the government give free money to people.Constraining interest rates to be low.Various “one decision” investment ideas.The prices of houses only go up.The government bails out bad investments.Various investments involving derivatives where one is implicitly short volatility I started … [Read More...]
Against Insurance Groups [AIG]
Photo Credit: Mindy Georges || The umbrella belongs to Travelers This is a bug in my bonnet, and I have written about this for at least 13 years, and maybe as long as 16 years, but insurance conglomerates don’t work well. After suggesting at least three times that AIG should break itself up, we are finally to the last stage of it doing so. There is a saying in the industry “Life Insurance is sold, P&C Insurance is bought.” They are different markets, and there is no reason for shareholders to own a company that does both. But some companies diversify. Who does that benefit? The main beneficiary is the management, as it gives them cover for underperformance. They can always blame transitory factors for … [Read More...]
Capital One Venture Rewards Credit Card: 2X Miles + 600,000 Miles Offer
The Capital One Venture Rewards credit card is their premium travel rewards card with unlimited 2x miles per dollars on all purchases. 60,000 miles can be redeemed as a $600 credit towards any travel purchase made with the card (any airline, any hotel, AirBNB stays, Uber rides, no blackout dates). Here are the highlights: 60,000 bonus miles (equal to $600 in travel including vacation rentals) once you spend $3,000 on purchases in the first 3 months after account opening. Flat 2X miles on ALL purchases. Up to $100 application fee credit for Global Entry or TSA PreCheck. Redeem on travel-from vacation rentals to car rentals and more. Plus transfer your miles to over 10+ travel loyalty programs. Miles won’t expire for the life of the account and there&#… [Read More...]
Hilton American Express Cards: 100,000 Bonus Points + $100 Hilton Statement Credit on No Annual Fee Card
New limited-time offers. Hilton Hotels and American Express have co-branded credit cards with special perks for Hilton customers. Each person can only get one welcome offer, per card in your entire lifetime, so it’s best to apply during a temporary bump-ups. Right now, the sweet spot might be this no annual fee card that can easily get you over $500 of value towards Hilton hotel stays. Hilton Honors American Express Card Limited Time Offer: 100,000 Hilton Honors points after you spend $1,000 in purchases on the Card in the first 3 months of Card Membership. Offer expires 8/25/2021. Limited Time Offer: Plus, up to $100 in statement credits on eligible purchases made on the Card at any of the Hilton family of hotels in the first 12 … [Read More...]
The Rules, Part LXXI
Picture Credit: Ron Mader || Humility is underrated. Without it everything is a fight. “Size expectations to resources and you will rarely be disappointed.” I would think that this one would be “common sense,” but I have another saying, “Common sense isn’t.” Many people engage in magical thinking, overspending and assuming that things will work out in the end. Under most conditions, it does not work out in the end. Living in reality is a key to happiness. Delay gratification, have a buffer, and invest for the future. What could be simpler? You might or might not be surprised at how many let short-term pleasure dominate over long-term well-being. I think it is hard if one is … [Read More...]
Capital One Venture Rewards Credit Card: 2X Miles + 100,000 Miles Limited-Time Offer
Limited-time 100k offer ending 7/19. The Capital One Venture Rewards credit card is their premium travel rewards card with unlimited 2x miles per dollars on all purchases. 100,000 miles can be redeemed as a $1,000 credit towards any travel purchase made with the card (any airline, any hotel, AirBNB stays, Uber rides, no blackout dates). Here are the highlights: 100,000 bonus miles (equal to $1,000 in travel including vacation rentals) once you spend $20,000 on purchases in the first 12 months after account opening. (OR still earn 50,000 miles if you spend $3,000 on purchases in the first 3 months.) Flat 2X miles on ALL purchases. Up to $100 application fee credit for Global Entry or TSA PreCheck. Redeem on travel-from vacation rentals to car rentals and more. Plus transfer … [Read More...]
Cookie Jars
Photo Credit: Lonnon Foster || Oh no! The cookie jar is empty! (This is another of my occasional experiments. I know it’s not perfect. Please bear with me.) James: Can I have a cookie? Accountant: That’s not the right way to ask. J: I did not know an accountant could be a grammarian as well. MAY I have a cookie? A: Sorry, there are no cookies left in the jar. J: I thought there were always cookies in the jar. I saw some people eating cookies recently. A: Well, they may have gotten cookies via side agreements. J: Side-agreements? What are those? A: You know the cookie rules? J: Uh ,no. What are they? A: Listen then: I gather the money for cookies … [Read More...]
Q&A on Estimating Future Stock Returns, March 2021 Update
Image Credit: Aleph Blog || The model fits the data well I don’t plan on doing this often, but I got a number of good responses on the last article, and I want to answer them in a more complete way, rather than doing it in the comments, where they for practical purposes never get read. Thanks for sharing your estimates and work on the average investor equity allocation. I recently wrote an email to you asking if you have done similar studies for other countries. I read that while the US has 45% the UK is at 10% average equity allocation. Have you seen if the average equity allocation can be applicable model for other countries or you reckon everything moves together with the S&… [Read More...]
Too Many Books, Too Little Value
Photo Credit: amanda tipton || When I was younger, I wanted to read the whole local library. Now that I am older, I doubt the value of most books. I’m getting older, and so are my readers. A practical impact of getting older is lightening up on possessions so that your heirs won’t have so much to dispose of when you die. My wife and I went through the whole house recently and eliminated 50% of the books that we owned. We threw away 5% of the books, thinking that no one should read them, they were too damaged, or, they were out of date. We gave 15% to our children, after inviting them to peruse what we were getting rid of. We also gave … [Read More...]
Estimating Future Stock Returns, March 2021 Update
Image Credit: Aleph Blog || Recently I was talking with a younger pastor friend of mind who is pretty bright. I have known him since he was a teenager. He said to me, “I have concluded the the stimulus actions of the Fed and the Government benefit the rich predominantly.” I told him that he was certainly correct. Sorry for being late with this update. Have you ever considered the idea that trying to avoid depressions encourages cronyism — the government favors the rich through QE and deficit spending? QE inflates assets and commodity prices. The rich benefit from the first, and the poor are hurt by the second. The same applies to most government spending programs. The rich employ accountants and lawyers, and find … [Read More...]
Chase United Explorer Card Review – 70,000 Miles Offer + Annual Fee Waived First Year
Limited-time offer boost. The United Explorer Card is a Chase-issued credit card that offers unique perks on United Airlines including free checked bags and expanded award seat availability for redeeming miles. Right now, they are offering 40,000 bonus miles with the annual fee waived during the first year. Here are the highlights: 60,000 bonus miles after $3,000 in purchases in the first 3 months. Plus, an additional 10,000 bonus miles after you spend $6,000 in the first 6 months. Plus, an additional 25,000 bonus miles after you spend $10,000 in the first 6 months. Free first checked bag for both you and a companion (a savings of up to $140 per roundtrip) when you use your Card to purchase your ticket. Expanded award availability. Having this card makes it easier to find … [Read More...]
Chase Freedom Unlimited Review – $200 Cash Bonus + 5% Back on Groceries in First Year, 1.5% Minimum Cash Back
Improved offer. The Chase Freedom Unlimited Card is a no-annual-fee rewards card which earns a flat 1.5% cash back on all purchases (or a possibly more valuable 1.5 Ultimate Rewards points per dollar spent). This is a different card from the new Chase Freedom Flex, which has 5% cash back on rotating categories, on up to $1,500 in purchases each quarter. Here are the highlights: $200 cash bonus (20,000 Ultimate Rewards points) after $500 in purchases in your first 3 months. Intro offer: 5X points (5% cash back) on grocery store purchases (not including Target(R) or Walmart(R) purchases) on up to $12,000 spent in the first year. 5X points (5% cash back) on travel purchased through Chase Ultimate Rewards(R). 3X points (5% cash back) … [Read More...]
Pay Down Debt, or Invest?
Photo Credit: Mike Cohen || Certainty versus volatility One question that many ask is “Should I invest or pay down debt?” Let me quote from a prior article Retirement — A Luxury Good. What is a safe withdrawal rate? A safe withdrawal rate is the lesser of the yield on the 10 year treasury +1%, or 7%. The long-term increase in value of assets is roughly proportional to something a little higher than where the US government can borrow for 10 years. That’s the reason for the formula. Capping it at 7% is there because if rates get really high, people feel uncomfortable taking so much from their assets when their present value is diminished. How should you handle a significant financial windfall? If you … [Read More...]