01/24/2022: Weekly Briefing
I spoke with a veteran financial advisor recently, and I asked about this “investing sin” I had read about in this book I mentioned the last few posts. (To recap, the book said investing sin #4 was “Diversifying” and that in “Reality: Warren Buffett’s amazing track record comes from identifying a half dozen great companies – and then taking huge positions in only those companies.”)
So I asked them what they thought about diversifying your portfolio and investments. And they responded with what I thought was a great analogy which I wanted to pass along.
To paraphrase: ‘Investing is like when you go to the gym to try to get good arms. You could focus all your time doing reps for your biceps, triceps and shoulders. But overtime, you’ll probably end up with arms being disproprotionately musculer to your legs, and more importantly, you’ll probably risk getting injured. So a trainer will probably tell you to balance out your workouts with some squats or cardio. This will also probably improve your arm performance in the long run.
Same thing in investing. Let’s say your goal is to save for retirement. It’s obviously very important to plan for that and focus on that, but it’s also important to balance that out with thinking about your budget today, planning for upcoming large purchases, and how do you balance your investments so that it gets you where you want to be for retirement.’
I thought this was a great analogy. What do you think? What’s your investing fitness plan?
Money & Crypto
Why crypto is so popular in Brazil. This makes me wish that my Fulbright was taking place right now. I researched mobile payments & microfinance in Brazil 10 years ago for my Fulbright, and it’s fascinating to watch how the digital money landscape has evolved. This plus NuBank’s recent blockbuster IPO makes me so excited for what’s to come. (Saudade!) (CoinDesk)
Crypto and bitcoin price falls (CoinDesk)
Blackrock to create a “blockchain and tech ETF” (The Block Crypto)
SEC pushes back on MicroStrategy’s “bitcoin impairment charges on non-GAAP measures”. What does this mean? Non-GAAP measures are calculations that companies and investors sometimes make that don’t follow the exact accounting guidelines (called Generally Accepted Accounting Principles, ie “GAAP”) put forth by FASB (the body that governs these rules). To make a long story short, the SEC doesn’t agree with the calculation that MicroStrategy is using to share its earnings with investors. (The Block Crypto)
This explains why I was having trouble finding frozen puff pastry dough to make my Galette des Rois…US food supply chain issues (WSJ)
Speaking of fitness and investing…Peloton announced “right-sizing” its production of bikes prompting shares to fall (WSJ)
Etc.
Doing dry January? Why non-alcoholic beers are becoming known for their taste
Final four NFL playoff teams…this weekend’s wild Chiefs win over Bills win was a thrilling game to watch
André Leon Talley, legendary Vogue editor, passes away. Highly recommend this Fresh Air interview with him.
Thierry Mugler, French designer, passes away
Disclaimer: All opinions are my own. The content on this site and on the podcast does not constitute financial, legal, accounting, tax, or investment advice.
