It’s Easy To Ignore The Basics

On April 1, I gave our Comprehensive Financial Planning clients a heads-up. The great thing about the internet is that there is a date and timestamp here.

Timestamps solve a number of problems when you receive information about anything about money.

“I knew that was going to happen” is widely seen and heard, but it is of very little use after the fact. Timestamps stop this. If you “know” the future, you do not need a diversified portfolio or any planning. I will make you unconscionably wealthy within days—by this coming Wednesday, with time to spare.

See the images from the video? You have seen them here on this newsletter, frequently. I am very certain that some of you are sick and tired of seeing them.

It is easy to forget first principles. Here’s some financial advice: don’t.

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For people not strictly educated in finance, it’s simple. X = Y divided by Z. Except that the Y and Z are the EXPECTED numbers, and X is TODAY’S price.

Notably absent from this framework: the name of political parties, the name of your clergyman, favorite philosopher, or the opinion of your Uber driver. They are omitted for a very good reason: 100% irrelevant. Example: Humana (and Jae) do not care about any of this when providing accurate pricing information.


You pay a premium, you receive benefits under certain situations, the amounts are written down in legal language, and the carriers have no choice but to fulfill their obligations. The narratives that carriers are refusing to pay, etc, are, therefore, usually that someone [ahem, you] has not correctly understood the situations and amounts from the legal contract. Carriers are setting this price to a) make sure they can pay claims, and b) make money, WITH THE UNDERSTANDING that their competitor also has access to the almost the same, exact information while setting their premiums.

Financial Markets:

The denominator is much larger, the participants are infinitely larger than any stock analyst that says that NVDA target price is $1000. This is not an understatement; bond market people laugh at stock market people, the money involved in the stock market is minuscule by comparison. And foreign exchange people laughed at us. So there’s that.

Do you believe that it’s a pure coincidence that the past and current CEOs of Blackrock, JPMorgan Chase, Citicorp and Deutsche Bank all came from the bond market???

The Blue Curve Became Flatter, No Question

When the denominator starts moving around with pace, then look at the formula above. The possible NPVs = possible prices = possible returns. In short, the blue curve is flatter, no doubt.

It’s Gonna Bounce Back, It Always Does. Yabit…

Two questions:

What if you are wrong?

When is this going to occur and will you have the financial standing to wait until that occurs? If you are 30 years old, sure. If you are 70 years old, and it is still uncertain whether or not you have enough, then relying on this quote means more worry. There is always uncertainty, the point is to reduce the excess uncertainty.