Apex Money Posts

Once you win the game, stop playing. (or play a different one!)

You Only Have to Get Rich Once. [Young Money by Jack Raines] – “Why is it so hard to hold on to the money we made? Because hitting a home run on an investment is euphoric. And beyond the dopamine rush, it strokes your ego, making you feel smart. Those good feelings cloud your judgement.

Financial returns are a seductive feedback mechanism. When something you invest in goes up by a lot, you feel like a genius, and you want to experience that rush again. And because your last bet was correct, you grow more confident, so you decide to double down on another trade. Maybe that investment works out as well, so you repeat the process again. Positive reinforcement in the form of financial compensation is one hell of a drug.”

In the end, it’s not really abut the money. Or, to be more accurate, it stops being about the money once you “make it.”

The trouble is that if you keep putting it at risk, you risk losing it…

We live near BWI Airport and in the last 20 years, I can count on a single hand how often I’ve flown domestically on an airline other than Southwest. (and in the last five years, it’s actually just once, to Asheville about four years ago)

Personally, Southwest is still our main airline but it appears there are a ton of changes on the horizon as a result of activist investor Elliott Investment Management.

While the video I’m sharing below isn’t initially related to that (well, it is related to an Elliott but not an activist investor), before watching I thought that’s what it was going to be about. (though they potentially set it up to be a potential part 2)

The video is still interesting as it highlights the risk of what was once Southwest’s strength – using a single type of airplane.

For those Apexians living in the United States and celebrating Thanksgiving, I wish you a restful and relaxing day with your friends and family.

We’ll be back next week!

The undisputed champion of stealth wealth.

Who died and left the US $7 billion? [Sherwood] – “Last year, observers with the economic equivalent of a radio telescope detected a radiating anomaly on the February 28, 2023, daily balance sheet of the US Treasury Department: a $7 billion estate- and gift-tax payment. […] He was struck, though, by the appearance of that enormous deposit. “The degree by which this payment exceeds others in modern history — it’s not just, ‘Oh, this was the biggest one by 20%,’” Ricco said later. This was the biggest one by a factor of seven.”

(which, by the way, also means that an estate once paid $1 billion in estate taxes)

Dan Suzuki, Deputy Chief Investment Officer and Chairman of the Investment Committee at Richard Bernstein Advisors LLC, looks at the best investments of the last 50 years to see what we can learn:

What Does a Once-in-a-Generation Investment Opportunity Look Like? [CAIA Association] – “At RBA, we believe that we are at a major inflection point in macro fundamentals and market leadership, offering investors a once-in-a-generation opportunity to reposition portfolios. To put the magnitude of this opportunity into perspective, we have identified what we believe are the best trades of the past 50 years — those asset class, regional and sector allocation decisions that would have netted the greatest long-term outperformance. Each of these trades would have generated excess returns averaging 7-19% per year spanning periods of 8-22 years:”

It’s an interesting analysis with some (kinda) expected conclusions – that many of the periods of growth coincided with feelings of American exceptionalism until valuations got too high. Yet today, with high valuations, many have doubled down.

If you want RBA’s conclusion, it’s in the last line of the article “With all eyes on US large cap growth stocks and disinflation beneficiaries, we see bigger opportunities in international, small caps, value stocks and inflation beneficiaries.”

Jonathan Clements, who was diagnosed with cancer earlier this year, shares 13 bits of advice for his kids, both of whom are now in their 30s. (it’s a mix of financial and life advice)

I’ve long been a fan of Jonathan’s work and have shared it numerous times on Apex and am still in awe with how he’s (at least publicly on this blog) living his life.

And his first bit of advice is to be an optimist! Absolutely amazing.

Advice for the Kids [Humble Dollar] – “1. Be an optimist. When you buy bonds, you rent out your money and get interest in return. But when you purchase stocks, you become an owner—and owning is the road to wealth. Sure, if the global economy collapses, you’ll end up broke. But so will everybody else, including those conservative folks who spent their life cowering in bonds and cash investments. Think of owning stocks as “heads I win, tails everybody loses.”

Moreover, over the long haul, losing strikes me as unlikely. Every morning, billions of people around the world wake up, trying to figure out how they can make their life better. Buying stocks is a way to profit from that energy and dynamism.”

It’s good advice for everyone.

Keratopigmentation is a medical procedure where they stick a needle in your eye and inject pigment, changing the color of your eyes. It’s expensive (~$12,000), not covered by insurance, and has risks (it’s surgery on your eyes, after all).

Until recently, it’s was a procedure mostly for diseased and injured eyes, not cosmetic.

Would you do it?

A $12,000 Surgery to Change Eye Color Is Surging in Popularity [Wall Street Journal] – “In the 2010s, doctors in Europe began experimenting with the procedure for cosmetic reasons. Many eye specialists say it is irresponsible for doctors to perform keratopigmentation on people with healthy eyes. The benefits might outweigh the risks for patients with diseased corneas, but there isn’t enough evidence to say the same for healthy people, critics say.”

Enjoy the weekend!

Jensen Huang, founder and CEO of NVIDIA, shares the best career advice he ever received – the source is a gardener in Japan:

The title is not hyperbole, I promise. And this is only related to money because it’s insurance fraud, but you have to see this.

OK, so someone filed three insurance claims for three different cars on the same date and location, claiming it was damaged by a bear.

Oh, and they provided footage of the bear attack! Except it’s not a bear.

It’s someone dressed up as a bear. And the “claws” are those “bear claw” products you use to shred pork or beef for tacos. (not actual claws)

And there’s video evidence of the fraud!

Not the brightest bulbs in this scheme.

Oh also, here’s the dead giveaway, a bear does way more damage to a car. It doesn’t gently open the door and just kinda scratch up the seat in completely unbelievable straight lines, it rips the car apart.

Tariffs are going to get a whole lot more attention now that Donald Trump was re-elected, but do you know they work?

More importantly, are you aware of the downstream effects?

This explainer by the Wall Street Journal does a really good job of explaining it all.