The Stingy News Weekly: 11/14/2021
Why the chip shortage drags on
"Analysts say the companies that make these chips may be reluctant to invest in new factories because the chips carry thin profit margins and the industry is notoriously cyclical, with spikes in demand followed by sharp declines. They fear a future glut of chips that would drive prices lower." [Tech]
When cash is king
"for ordinary investors, the moral is clear: To prosper, one needs industrial quantities of patience, cash and courage - in that order." [Behaviour]
Investing lessons from the stoics
"A central concept of stoic philosophy is negative visualisation. By regularly reflecting on what could go wrong - losing your job, getting ill, even death - you will be more prepared for bad outcomes. Negative visualisation is equally powerful in business and investing." [Behaviour]
Crazy or normal?
"I can't help but think about the research papers that will be written on the current marketplace. There will certainly be differences, at the margin, but it is truly the case that when it comes to human behavior, history repeats itself. Over. And over. Again." [Markets]
"Now where there is the ability to self-correct, eventually societies will remove regulators, politicians, etc. That said, some things are more entrenched than others. I speak of the cult of stimulus. What is more untouchable than the central banks? It's hard to think of anything more unaccountable. They may technically be beholden to the local parliament, but practically, no one ever messes with them aside from despots pursuing hyperinflation" [Government]
The mirage of direct indexing
"Regardless, managing an investment portfolio based on tax decisions is wrong in principle and carries significant risks, for example, selling losers at an inopportune time, say during a stock market crash. Typically, the worst-performing stocks rally the most during recoveries. So, if these have been sold off, the investor captures the full downside but only a portion of the upside." [Indexing]
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