Month: April 2018

The Three Kinds of Performance

© Can Stock Photo / edharcanstock

In our recent reading, we came across another useful concept from Morgan Housel. He talks about the three kinds of investment performance:

1. Bad.

2. Overall good, but occasionally bad.

3. Always good but fraudulent.
Many have had experience with the first one. The last one is obviously not a place to be. The key to the second one, according to Housel, is communication. Communication builds the trust required to get through the rough patches and down times.

Every day we are grateful for you, whom we believe to be the best clients in the world. You talk to us, you listen to us, we usually understand each other. We work to communicate in various ways, but it is a two-way street!

You know we won’t get mad if you ask a pointed question—if it is in your head, we want to hear it. You trust us enough to start a dialogue when you think we may not be on the same page. When there is something you think we should know, a development in your life or an investment idea, you tell us.

And we do you the honor of believing you can handle the truth. If we need to acquaint you with some aspect of changing reality as we see it, we do so.

Our mutual trust and straightforward communications seem very valuable. It is indeed the key to living with ups and downs. Our best guess is that things will turn out well, on balance, over the long haul. Of course, we can offer no guarantees.

Clients, if you would like to discuss this or anything else in more detail, please email us, call, or set an appointment.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

All investing involves risk including loss of principal. No strategy assures success or protects against loss.

Amazing But True

© Can Stock Photo / kryzhov

The twin pillars of American prosperity have been relative freedom for each person to make the most of what they have to work with, and a generally competitive marketplace for goods and services. Count us among the fans. But this essay is about one of the worst features of modern American capitalism.

Some of the world’s largest corporations often receive incentives from governments at various levels to encourage them to bring their businesses. These incentives are paid by tax dollars from the rest of us that are not fortunate enough to receive them.

Local governments are currently engaged in a bidding war to lure a headquarters of a major retail giant. Newark, New Jersey has supposedly offered $7 billion and other locales are also bidding billions.1

It is not hard to imagine that Newark contains storekeepers and shop owners who compete with the company Newark is trying to woo. These people and other citizens ultimately are the ones who pony up the money to subsidize this powerful competitor. Other enterprises are taxed by the government so one enterprise can obtain huge favors from that government.

The Fourteenth Amendment to the Constitution of the United States guarantees us equal treatment under the law by state and local governments. We believe it isn’t happening in this case.

Local governments struggle to find money to pay teachers adequately, keep roads and bridges in good repair, and provide amenities like parks and transportation systems. It isn’t as if money grows on trees.

The justification made by economic development bureaucrats is that the incentives paid to large companies will be repaid with jobs and economic growth. But that conveniently ignores the underlying fundamental fact. Every facility of every type needed by every for-profit enterprise will get built somewhere, whether there are incentives or not.

Imagine if the U.S. government or court system adopted the protections of equal treatment under the law to this economic arena. Local governments could still compete for new facilities. But they could do so on the basis on the quality of the schools and workforce and infrastructure and public amenities.

The equal treatment approach to economic development could strengthen and build our communities as leaders seek to make the most attractive locale with the best-educated workforce. Contrast that with the current mess: taxes on the little guy are given to the large and powerful, at the expense of public necessities and amenities.

Clients, if you would like to talk more about this or anything else, please email us or call.

1Bloomberg, Christie Backs Newark’s Amazon Bid With $7 Billion in Tax Breaks. October 16, 2017.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

The opinions expressed in this material do not necessarily reflect the views of LPL Financial.


Frisky as a Puppy

© Can Stock Photo / mvaligursky

We recently wrote about our plans to keep on managing your needs, and those of the friends and loved ones you keep sending to us. Bottom line, we have to scale up.

Greater effectiveness gives us the time we need to talk to you and understand what you are trying to accomplish. Our systems and our staffing are key to the effort. The scale we are building adds to the resiliency of the organization.

An interesting byproduct of intending to work to age 92 is that the business seems as frisky as a puppy. Why? Maybe because I have thirty more years to work. While some of my colleagues are coasting into retirement, we are planning for the decades ahead.

Those plans are getting exciting.

1. You know about the understudy to our Client Service Specialist Larry Wiederspan: Patsy Havenridge, Client Service Assistant. She is already on the job, working and training with Larry and Greg.

2. Technology Associate Max Leibman is working on a project basis, part-time, building a new operating system for the business. This will last through year-end, or longer. This new system will be a platform to automate and simplify our administrative tasks, freeing up our staff to spend more time with you and on seeking opportunities to grow your accounts.

3. Our Marketing Associate Caitie Leibman, within three semesters of her doctorate in English, is spending some part-time hours for the firm–outside of and without interfering with her current work as Director of the Writing Center at Doane University. Fittingly, she is collaborating with Greg Leibman to improve our communications and provide more consistency.

4. Caitie’s partner, Operations Associate Billy Garver, is also engaged in projects for us. His master’s degree in statistics is a good base from which to add depth to our research and portfolio management capabilities. His work with online course content provides some insight into things we are trying to do with He will continue to serve on the adjunct faculty at Doane University.

We cannot know whether the current projects turn into more permanent connections with these talented people. But having more of the next generation more involved with 228 Main is wonderful.

Clients, if you would like to talk about this or anything else, please email us or call.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

Doane University and LPL Financial are not affiliated.

Create Your Own Adventure

© Can Stock Photo / Elenathewise

Narratives, or stories, are how we understand the world and our place in it. They have played a powerful and positive role in my life. For example, the narrative about working to age 92 has given our enterprise a vitality and dynamism that those coasting toward retirement may lack—among other benefits.

More importantly, your narratives shape the work we do for you. While your story is highly personal and unique, many fall into one of three general patterns.

1. Some of our clients are retirees whose narratives involve being a good steward of their wealth, enjoying life by living modestly but well, and aiming at leaving a legacy to succeeding generations.

2. Others are more focused on travel or other things that were not possible during their working years, and having the cash flow to comfortably support those things.

3. Younger clients often are aiming at building financial security and ultimately becoming financially independent.

The foundation of your narrative is your core principles, or what you are trying to do with your life. When your story connects with the most fundamental thing about you, it may be more likely to become true. What are the three most important things in your life?

Where and how do you want to live? What role will family play in your activities? How will you spend your time? Will you work at something you enjoy for pleasure in later years? Is entrepreneurship in your future?

You do yourself a big favor when you realize that life is your own adventure. You can create it.

Sometimes your story has to change because life happens. One chapter ends and a new one begins. We are almost never done with new chapters and new stories. Resiliency and adapatability, making the most of what you have to work with, are useful additions to any story.

Clients, if you would like to talk about your story or anything else, please email us or call.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.