Burger, Fries and a Plane Crash

Well-known risk consultant Peter Sandman wisely observed that, “The risks that scare people and the risks that kill people are generally entirely different.” Why is this? His conclusion is that it has to do with control and familiarity. It seems that we are much less afraid of things that are familiar and that we feel are in our control (even if they are, in fact, much more dangerous). The truth of Sandman’s observation hit home for me one day as I was enjoying a juicy burger and freshly cut French fries at one…Read more

Warning: Being Helpful Might Hurt Your Marriage

A study by Norwegian researchers Thomas Hansen and Britt Slagsvold found that equally sharing housework between spouses might be bad for your marriage. After analyzing data of thousands of Norwegian couples, Hansen and Slagsvold found the divorce rate was higher for those doing equal amounts of housework than in couples where the women did more of the work. My first thought after reading this was that the International Association of Married Men must have funded the study.  Okay, there is no International Association of Married Men (at least not that I am aware…Read more

How To Tell Your Spouse You Lost $262 Million

Easy Come, Easy Go In his book, Why Smart People Make Big Money Mistakes, Gary Belsky relates a fable that goes something like this: By the third day of their honeymoon in Las Vegas, the newlyweds had lost their $1,000 gambling allowance.  That night in bed, the groom noticed a glowing object on the dresser.  Upon closer inspection, he realized it was a $5 chip they had saved as a souvenir.  Strangely, the number 17 was flashing on the chip’s face.  Taking this as an omen, he donned his green bathrobe and rushed…Read more

Presidents, Politics and Your Portfolio: Focus on Planning Not Predicting

It’s no surprise that this year’s U.S. presidential race has become a subject of conversation around the globe. The frequency, and intensity, of these conversations will probably only increase as the November 8 election date nears.   We are by no means endorsing that you ignore what is going on in the world around you. Politics and politicians regularly and directly affect many aspects of our lives and our pocketbooks. But as you think through this year’s raucous race, remember this:   The more heated the politics, the more important it is to…Read more

Death By Anecdote

Suppose you have a perfectly healthy 100-year-old neighbor who never exercises and smokes two packs of cigarettes a day. Would you quit exercising and start smoking two packs a day in hopes of living a healthy life into your 90s?  Would you begin living your life based on their story?  Of course not!  This could, quite literally, lead to death by anecdote.  You would be making a serious, life altering decision based on a single data point – your neighbor.  As silly as this example seems, you may unknowingly be making investment decisions…Read more

Take a Walk on the Mild Side?

A friend recently sent me an interesting article entitled How Happiness Comes With Age - Becoming Okay With Being Boring.  I’m guessing I liked the title so much because I am a CPA and have mastered the art of being boring.  If you ever need someone to liven up a party, just give me a call and I will give you the phone number for my friend Ron - he is really fun. One particular part of this article jumped out at me as it relates to investing.  The writer was discussing our…Read more

One Sale People Avoid

People who know me well will tell you that I tend to get in a rut when it comes to food (I prefer to think of myself as consistent).  If I’m not going out to lunch on a particular day, one of my ‘rut’ foods is a pack of tuna with some lemon.  It’s easy and inexpensive - a beautiful combination to my way of thinking! What is also beautiful to a numbers guy like me is walking into the grocery store and seeing that one of my ‘rut’ foods is on sale. …Read more

Just Say No to Goals

The Dark Side of Goals Over Christmas break I was watching my three-year-old nephew having a great time playing a game on an iPad.  That is, until my son got involved.  It wasn’t that my son was trying to ruin his younger cousin’s fun - he was actually trying to be helpful.  He simply told his cousin the goal of the game, which was to finish one level in order to move on to the next.  By moving through enough levels, he could eventually beat the game. Apparently, my nephew did not understand…Read more

Lessons From a $2 Billion Loss

I would like to put forth my first nomination for the understatement of the year award. For this prestigious award I would like to nominate Jamie Dimon, the CEO of JP Morgan. In response to a trading bet that lost $2 Billion (yes, that is billion with a ‘B’), Mr. Dimon said that the trading bet that the firm made was “poorly reviewed, poorly executed and poorly monitored”. To my way of thinking, “poor” seems to leave the door open on the performance scale to something worse, like say, “terrible”. If a “poorly…Read more

Are You In a Place for Some Feedback?

Previously, we discussed overconfidence and its dangers when it comes to investing and making financial decisions. In this post, we want to talk about some fairly simple things you can do to combat overconfidence. One of the best therapies for overconfidence is feedback. In a nutshell, feedback allows you to compare what you thought would happen with what actually happened. In some cases, life can give us feedback immediately. For example, you touch a hot stove, you get burned—quick feedback. The world of sports can provide immediate feedback as well. In basketball, when…Read more