The Stuff You Cannot Miss

I just wanted to wrap the week up with a few links because I’ve been reading so much great stuff and I didn’t want you to miss any of these…

Nick Maggiulli went long-form on why it’s so easy for people to be tricked by anecdotes and information derived from small sample size research:

It’s easy to poke fun at humans for their reliance on small sample sizes when making decisions, but this criticism fails to recognize our ancestral environment.  We evolved in a world where making sure you had a sufficient sample size before making a decision was not necessary to pass on your genes.  In fact, waiting for a sufficient sample size would most certainly lead to the opposite result—your extinction.

Read it:

N = 1 (Of Dollars and Data)

Morgan Housel on why economic history keeps repeating (or rhyming):

only seven plots exist in the history of fictional storytelling: 1. Overcoming Monsters, 2. Rags to Riches, 3. The Quest, 4. Voyage and Return, 5. Rebirth, 6. Comedy, and 7. Tragedy.

It’s not that all stories are the same. It’s that the plots that make good stories are less diverse than the characters and scenes that populate good stories.

And what is economics if not an exercise in narratives and belief systems?

Read it:

Common Plots of Economic History (Collab Fund)

I got a question this week from a prospective client about the long-term problem of increasing US debt. I gave a decent answer, but Ben Carlson really went above and beyond here to explain the current situation and put it into context. You will be sharing this for a long time to come.

If you want to get people worked up about the financial system the easiest thing to do is mention debt.

It could be U.S. national debt (clocking in at a whopping $23 trillion).

Student loan debt is, of course, another favorite that gets people worked up.

A new entrant into this game is auto loan debt.

Keep reading:

U.S. Household Debt Isn’t As Bad as You Think (A Wealth Of Common Sense)

My friend Phil Pearlman is back in blogging mode – his new post unveils the number one value investment everyone should be making right now. I ought to heed his advice myself…

There is one value investment that generates massive gains while remaining immune to market cycles, bubbles, fads, crashes, rates or the economy.

What is it? Find out here:

THE GREATEST VALUE INVESTMENT OF ALL TIME (Eight Fat Swine)

Finally, two opposing views on the stock market buyback binge – kind of a point / counterpoint – from two of the brightest market writers we know. First, we had Ben Hunt of Epsilon Theory come up and explain to us why economic unfairness is at the heart of our political mood these days and how buybacks are fueling it:

And then Ed Yardeni came by and demonstrated, with charts and data, that if buybacks are behind the outsized compensation for CEOs and other executives that has drawn Ben’s ire, they can’t be that big a part of it, and they’re more democratically arrayed across a company’s employees than you think:

I strongly suggest you don’t miss any of this stuff. It’s going to make you better informed and help you make wiser decisions about how to invest, what to worry about and what to file away for the next time you encounter a panic in the streets.

Thanks for reading and have a wonderful weekend!