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You are here: Home / business / Why I can’t pick winning stocks, and you can’t either

Why I can’t pick winning stocks, and you can’t either

by jlcollinsnh 23 Comments

Don’t feel bad.  Most pros can’t either.

Indexing vs. active management is always a fascinating debate; at least for us stock geeks with nothing better to do.  Over the decades I’ve been on both sides of it at various times. For a very long time I laughed –ha, ha, ha, ha — at the indexers.  I made all of the arguments, and then some.

 After all, if you just avoided the obvious dogs you’d do better than average, right?  Who would be stupid enough to own GM a couple of years ago?  Or Ford?  Opps.  Better forget about Ford.  Hindsight is a beautiful and perfect thing.

Convinced I could win this game, after all I’d just bought a stock that tripled, I even took a major pay cut to join an investment research firm mid-career.  about 

There I was, surrounded by exceedingly bright people.  Each focused on one, maybe two industries and perhaps 6-10 stocks.  More than one had been honored in the trade press as “Analyst of the Year” for their work.

They knew each of these companies inside and out.  They knew the top executives.    They knew the middle-managers and the front line people.  They knew the customers.  They knew the suppliers.  They knew the cute receptionists.  They spoke to them all weekly.  Sometimes daily. 

They still didn’t get info before anyone else (that’s insider trading, fool proof and, ah, illegal).  But they did know exactly when and how the info would be released.  Of course, so did every other competent analyst around the world.  Any new information was reflected in the stock price within minutes. 

They issued reports our institutional investor clients paid dearly for.  And yet, predicting stock performance remained frustratingly elusive. 

If you’ve worked in a major corporation it is not hard to see why.  The CEO and CFO work with internal forecasts from their teams.  The process looks something like this:

Salespeople are required to forecast what their customers will spend.  Since these buys are rarely locked in far in advance, and can be cancelled anytime, nothing is certain.  Add to this all the pending business that may or may not come to fruition and basically you are asking the field salesperson to predict the future.  Typically they are not clairvoyant.  So, of course, they take a guess.

These guesses get passed on to their managers, who are also not clairvoyant, and who now have their own forecasts and decisions to make.  Do I take these sales forecasts at face value?  Do I adjust them based on knowing Suzy is an optimist and Harry always sees dark clouds?  So, of course, they take a guess and pass it on to the next layer of management.

So it goes until all these guesses on the inherently unknowable future are consolidated into the nicely packaged budget/forecast binders presented to top management.  More often than not, after one look, they’ll say:  “This is unacceptable.  We can’t present this forecast to Wall Street.  Go back and revise these numbers.”  Back down the chain it goes.  Maybe multiple times, and each time the numbers get a bit further from reality.

Now predicting the future is a dicey proposition for even the most gifted psychics; and they are not burdened with this process.

Suddenly my enormous stock picking hubris was clear.  Somehow reading a few books and 10ks was going to give me an edge?  Over not only the professional analysts who lived a breathed this stuff all day every day, but also the executives who run the companies in question?  I could succeed where they could not?

Suddenly I realized why even rock star fund managers find it almost impossible to best the simple index over time.

There is a reason names like Buffet and Lynch are so revered and well known.  There are also reasons more fortunes have been made brokering trades than making them.

That’s why I’m now an indexer.  If you choose to try to best the averages, God Bless and God Speed.  You may well be smarter and more talented than I.  You are most certainly likely to be better looking.  I’ll look for your name along with Warren and Peter’s in the not too distant future.

I extend the same to all those folks I’ve met in Vegas who assure me they have bested the house.  I listen, gaze up at the billion dollar casinos and reflect on how many smarter, more talented and better looking people there are than me.

Oh, and that stock that tripled?  Well, even a blind squirrel……

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A short analogy illustrating the point

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  • Tuft & Needle (T&N) helps me sleep at night. They are a very cool company with a great product. Here’s my review of what we are currently sleeping on: Our Walnut Frame and Mint Mattress.
  • Vanguard.com

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Comments

  1. Sean says

    January 2, 2012 at 10:19 pm

    Yep, those glittering Vegas palaces were all funded by people who thought they could beat the house. Of course if you head over to the Poker room, you’ll find people who can win consistently with skill, because they have found ways to invest their money in situations where they have a statistical advantage.

    Most Poker players also lose, admittedly. But some win – year in, year out.

    Reply
    • jlcollinsnh says

      January 2, 2012 at 11:11 pm

      The key to poker in Vegas is that, unlike any other game, you aren’t playing against the house.

      as I describe here: https://jlcollinsnh.com/2011/07/01/johnny-wins-the-lotto-and-heads-to-paris/

      I used to play in a regular game in Chicago and made a pretty good dime or two in the process. It is the only “gambling” I’ve ever enjoyed because:

      1. It is a game of skill. Statistically, every player will receive the same number of winning and losing hands over time. The guys who walk out with the money are the guys who know which is which and how to play them.

      2. I didn’t have to be the best player at the table to make money. This was important as I was rarely the best player. In poker the top two or even three players take home the cash.

      I remember playing in a high stakes game in Vegas for the 1st time. It became clear quickly that four of the eight seats were occupied by pros. They spent the night cleaning out the tourists who’d sit down for the 20 minutes or so it took them to bust out.

      The pros hated me. I wasn’t good enough to win but I was good enough that it took them all night to clean me out. That made for a far less productive seat.

      Reply
      • Zack says

        August 20, 2017 at 3:20 am

        Have you noticed that everything you said to rationalize your poker playing could also be said about stocks? Warren Buffet’s record is nearly proof skill is useful in stock investing. Every person has the ability to buy the same stocks. It is just which ones you buy and when. You don’t have to beat the house, just the other people in the market. You don’t need to pick the best stock to make money, etc…

        Reply
  2. The Keichi One says

    July 7, 2012 at 6:45 am

    I’m coming back and reading through your blog Jim. This is such a great post. I really like the clipart, complete with watermark, of the “cute receptionist.”

    Reply
    • jlcollinsnh says

      August 15, 2012 at 1:23 pm

      Thanks, KO…..

      great to have you over here!

      I liked that pic, too!

      Reply
  3. VK says

    March 15, 2014 at 11:39 pm

    Hello Jim,
    I love your articles and agree with most of them. I’m on the fence on this particular one.
    I’m currently following AAII’s model shadow stock portfolio which has worked great for me since I started following it in the past couple of years.
    I’m young and have been investing only a few years in the market and I’ve been seeking the answer to this question – should I invest in individual stocks or index funds.
    AAII’s shadow stock portfolio’s return since inception in 1995 has been 17.9% vs S&P 500’s 9.43% for the same period. It seems to me that their model certainly seems to be working. I would like to know your thoughts as well. Do you still believe it’s better to invest in VTSAX vs just shadowing AAII’s model stock portfolio?

    Reply
    • jlcollinsnh says

      April 10, 2014 at 10:07 am

      Hi VK…

      Glad you love what you are finding here and hope you continue to read more.

      This post is really at the core of what I believe and discuss here. It is not just my opinion, but the conclusion of an ever increasing body of research. Even Warren Buffett, perhaps the best stock picker of all time, is on board with the concept of indexing.

      I am unfamiliar with the AAII model you mention, but there are countless investments out there striving to out perform the market. Some do for some periods of time, and they are endlessly creative in presenting their track records in the most favorable light.

      But every prospectus carries this warning: “Past performance is not a guarantee of future results.”

      The are both the truest words in these documents and the most ignored.

      It is easy to look back and find the funds and portfolios that have outperformed in the past. It is impossible to predict which will do so in the future.

      That said, it is great AAII has worked well for you so far and I completely understand the temptation to continue. It just seems so reasonable. It took me years to accept how vanishingly difficult it is to outperform the market and how rare and fleeting those that seem to are.

      For more, check out my story of CGMFX at the end of this post: https://jlcollinsnh.com/2011/06/14/what-we-own-and-why-we-own-it/

      Good luck!

      Reply
  4. engineer2freedom says

    July 8, 2014 at 7:21 am

    Hi Jim,

    I’ve been reading your blog for a number of years but this is my first comment. Thanks for all your efforts.

    This is a great topic and rarely discussed. I have a few personal theories that others may or may not share. I would agree that the external stock price is almost completely unpredictable as it depends on the market participants and their level of the analysis of the company. For example, if they have done a great deal of analysis you would expect closer tracking between the quoted stock price and internal earnings than if the market participants just rely on staring at meaningless charts and momentum following. I also think that if the company pays a sizable proportion of it’s profits out as a dividend you would expect a stronger coupling between what’s happening internally on the financial statements and the external stock price.

    For an investor that is concerned primarily with receiving growing dividends (I don’t see the point in stocks that don’t pay me), the unpredictable stock price growth can become an irrelevance as long as earnings are growing internally and cash flow is fine. It is possible to geometrically predict (The rarely discussed “T-model”) the growth of both the internal earnings and external dividend to an extent if a certain amount of stability can be assumed in the financial statements. For example, a P/E of 10 and a 50% payout ratio should lead to a 5% dividend payout and 5% growth in equity, and hence 5% growth of the dividend (assuming further re-investment in the business does not hit diminishing returns) each year as a rough estimate. Obviously the next year may not be exactly the same, but concentrating on how much earnings you are buying and the dividends rather than the stock price behavior is a much more predictable animal. I like to have a reasonably stable “base” income from dividends whilst still allowing to reap additional (though completely unpredictable) capital gains for further rewards if the stock gets bid up beyond reason. I only sell then if I think I can buy more earnings and dividend payout with an alternative issue.

    Reply
    • jlcollinsnh says

      July 8, 2014 at 9:56 am

      Hi e2f…

      and welcome. I’m honored to hear you’ve been a reader for the past few years – hard to believe I’ve been doing this for over three years now! – and I’m glad you’ve chosen to comment.

      If you’re interested, here’s my take on DGI: https://jlcollinsnh.com/2011/12/27/dividend-growth-investing/

      Are you planning to attend FinCon this year? If so, maybe we’ll have a chance to meet.

      Reply
      • Engineer2Freedom says

        July 9, 2014 at 4:43 am

        Hi Jim,

        Thanks for the other link. I also like the Dividend Mantra blog. Not sure I can make FinCon as I am in Japan and have an old house to restore this year. But would be good to share more ideas. Sorry for the long post, but here are some further thoughts on your “Dividend Growth Investing” article:

        Point 1. With vanishingly rare exception Index Investing bests all other methods.

        I think that the pros can’t do active investing because of both the size disadvantage and career risk. Whilst it is not common, I believe active investing possible from what I have read and from my own experience. See “The Superinvestors of Graham and Doddsville”. This was Buffets excellent rebuttal of efficient market theory. It’s an amusing (and short) read talking about how all the Graham students did well beyond the odds.

        It is possible to find very good returns in the market but easier when small cap companies are considered. This rules out the big guns and massive funds as they have too much scale to invest in those small companies. I also think most studies on the subject recommending ETFs have only concentrated on professional funds, whos size may still be too large. The financial industry would also have a vested interest to push “passive investing” and they fund all of the university professors! The only Economists I believe are not frauds are from the “Austrian School” which was the economic thought before the Keynesians took over around the 1960’s.

        For mass market, where the majority of society needs to invest, I agree the only possible way is with index funds. Active investing is not possible if your scale is too large and moves the market for particular stock. This must be true by definition, because the mass market is basically all of the investors, but if you succeed in purchasing under-valued securities then those must have been sold by others at too low a price. It’s a zero-sum game and there unfortunately must be winners and losers. The winners have done the most homework. If everyone has to invest, then it must be sub-optimal as they will have to buy an index containing both overpriced and underpriced companies.

        Point 2. Taxable event. This is of course OK if you are already retired. But very difficult if you are working at the same time in UK, US or Japan where taxes can hit over 40%. Some other more economically free countries (Hong Kong or Singapore) do not tax dividends. As a result companies in those countries tend to have higher dividend payouts. In those countries dividends of up to 8% are quite common even for large REITs as of 2014. The financial press in those countries is entirely less useless than in the west.

        I think the trend towards high taxes on dividends in the western countries has resulted in a great decoupling between the stock price and financial statements due to the loss or reduction of dividends for the most part over the last 50 years. Books in the 1940’s emphasized dividends a lot as “proof” of real profits not suspect to accounting shenanigans. For example Graham and Dodd’s “Security Analysis” is an easy read and makes a lot of sense rather than modern books mentioning the “efficient markets” mumbo jumbo that seemed to arrive around 1950.

        Point 3. Dividends do cause a reduction in company value.

        This is true, however consider that:

        – It is necessary to have some income to live off. Selling when others are fearful is bad.
        – Dividends are more stable than stock prices.
        – Dividends paid in a time of turmoil allow you to re-invest at fire-sale prices.

        In some cases, it may not be possible for the business to expand easily (marginal return of further investment in the capital of the business is less than the existing return from the business) in this case it is better to pay out all the profit to the shareholders. I think this is referred to in the “Security Analysis” book. It discredits the “empire builders” who want to re-invest all of the profits back into the business on grand (but possibly unproven) schemes to grow the company. This might be better for their self aggrandizement but if it lowers the average ROE it was a poor decision for the shareholder. Some business should just stay the size they are.

        Dividend Mantra’s comment perfectly reflects my previous post thinking regarding using the T-model to predict returns: “The extreme gyrations do not affect my steadily rising dividend checks.”

        Regarding your comment: “The price you pay is lower potential growth.” That is true, however if the company that paid out that dividend still offers the best return for you, then you can still buy more of their stock with the dividend and create growth this way from all of the profit (paid out plus retained). You have a choice, unlike if all of the profit is retained.

        As I understand and agree, the issue of dividends getting taxed at a punitive rate of income tax is an enormous problem if you are working as an employee, and don’t live in Hong Kong or Singapore. In this case I do understand the argument against dividends. Unless you can ship all your capital to Bermuda using a yacht full of gold bars 🙂 Most of the elites in the US have probably taken such measures.

        I think given two companies of otherwise identical financial ratios, the one with the larger proportion of profit paid out as a dividend should have a better correlation between what the financial statements say and what the stock price does. The one without a dividend will have a looser “coupling”. But in the end even a company with no dividend should have the stock price converge eventually due to other events such as corporate takeover, which should force the true worth to appear in the stock price as highly numerate individuals are involved in those deals. It’s just that it will be more of a wild ride and could take many years. And during that time you can’t collect any benefit if the market goes the wrong way, even if internally everything is good with the company. So if you have already retired switching from non dividend paying to dividend paying stocks seems like a good proposition.

        Reply
  5. Ben says

    August 12, 2014 at 5:39 pm

    Great Post Jim. I think you’re right for the most part. You either have to be fully diversified and hope that the market goes your way. If you are going to invest actively, you must spend quite a bit of time doing it and just make really good investments.

    I’ve done a fairly good job over the years but I wouldn’t call myself a market sage. Often times I’ll go years between investments where its sitting in cash or liquid bonds. I think the key is to make a few good investments and watch those investments very closely. Warren Buffet has said something to that effect, I think. So I’ve found that its best to invest in what you know in and with as much as a margin for error as possible so that when you’re wrong you’re THAT wrong. Keep in mind that I spent 4 years in college learning about investments then preceded to work in the Investment banking business for 2 years after college. So for the average Joe, you’re probably right.

    It seems like as time goes forward that there are fewer and fewer gems in the public market. The market for private equity seems to be gaining momentum and due to regulatory restrictions a lot of companies don’t see the benefit in going public. I’ve found that most of the good investments in public markets now come from special situations with overzealous selling in the market with a short time horizon outlook.

    There’s still hope for getting decent returns in the Public Stock Market, it just might not be as “easy” as it was in the past with less asymmetries of information(proliferation and speed of information spread through the internet) and the rise of private equity markets.

    That being said, I love your blog and found it through a manifesto quote you posted on Mr. Money Moustache. Thanks for all the insight, love your writing.

    Reply
    • jlcollinsnh says

      August 19, 2014 at 6:16 pm

      Welcome Ben…

      Glad you like the post, the blog and my writing.

      That said, I’m afraid I still think chasing individual stocks is a loser’s game, regardless of education or experience. And the research clearly supports this position.

      Here’s more on my take: https://jlcollinsnh.com/2013/02/05/stocks-part-xv-index-funds-are-really-just-for-lazy-people-right/

      Reply
  6. Henry says

    May 8, 2015 at 10:25 am

    Hi Jim. I just recently stumbled upon your blog. I sure do wish I had read all of this ten years ago. But here I am, trying to straighten things up. With that said, given the topic at hand, how would one argue/debate with a broker at a major firm, say Merrill Lynch or American Funds? 1) There have been personal relationships developed and 2) These guys truly believe that what they’re doing is better than the competitors. But when stats suggest otherwise, and my gut says get into Vanguard Indexes, how do I backpedal out of these snakepits w/o destroying a friendship, and more importantly knowing that I won the debate? Thanks for your help and thanks for all of these great posts.

    Reply
    • Ben says

      May 8, 2015 at 7:30 pm

      Henry,
      I know how that can be. I have a few friends who are financial advisors. Most of them aren’t that smart and simply are good at the financial sales game. These people potentially have cost you thousands of dollars, maybe even more. they probably know that index funds are cheaper and better than their products but they don’t make as much money putting clients into index funds. They didn’t have your best interest at heart and more their wallet. Perhaps they really do believe in their product. Look at it this way, Would you be worried about how a thief felt if you called him out on stealing thousands of dollars from your wallet? It’s the great American deception. 401k fees. With your friends, ask them exactly what all the fees are and compare to vanguard. Then compare the returns net of fees. More Than likely they will be beat. Then say that you’d like to stay with them but it’s costing thousands of dollars to do so and it just doesn’t make financial sense. Those funds take hefty fees whether you make money or not. If you have a 500k portfolio this potentially $5,000+ dollars a year. Good luck!

      Reply
    • jlcollinsnh says

      May 10, 2015 at 1:22 pm

      Hi Henry….

      1. When I was first starting out in business and sales, I called on a customer with my boss. They were about the same age and had clearly known each other for years. They greeted each other as old friends and talked about many personal things. I was impressed with how close their personal friendship was. When we got on the elevator to leave and were alone, my boss turned to me and said “If that son of a bitch doesn’t spend at least $X with us this year I’m never fucking talking to him again.”

      2. They might very well be true believers in what they are selling. The financial firms that hire them and/or persuade them to sell their products work very very hard on selling them first. True believers are, after all, the most persuasive sales people. Or they might be aware of all the research that shows just how much more effective low cost index funds are, and simply not care. After all, the other stuff is what gets them paid.

      If you pull out, you’ll find out quickly how real their personal relationship with you is. My guess is it will be the end of the friendship which, of course, means it wasn’t a friendship at all.

      As for winning the debate, why bother?

      One thing these guys are likely to be very well trained for and very good at is persuading people to stay with them. In addition to having more training for the debate, they will also have far more practice than you can hope for. Remember, the winner of any debate isn’t the person who is right, it is only the person who is the better debater. There is no need for you to engage in a debate with them, let alone win it.

      If you are ready to leave, you don’t have to explain yourself to them. You don’t have to convince them that it is a good move; and you never will. You only have to convince yourself and then do it.

      If you haven’t already, check out this post and the comments in it: https://jlcollinsnh.com/2012/06/06/why-i-dont-like-investment-advisors/

      +1 on Ben’s points as well.

      Good luck!

      Reply
  7. Josh Allwine says

    April 10, 2016 at 8:27 pm

    Frankly, there are simple edges given to buyers of small stakes in companies vs. buying indexes.

    Advantages:
    1 – Fees – I buy stocks in whole lots ($50 per stock per month via sharebuilder – equal-weighting mostly but I have no firm rules). I pay $144/year to do this, and as my portfolio grows in assets I still pay the say amount. Any index fund will charge a fee that is based on assets under management, and this inherently grows over time with the size of your savings. I prefer the fixed fee as it decreases the expenses over time rather than increases. If I ever prefer to do no investing at all and take a year off, I won’t pay anything at all. The cost curve is tough with 0.05% expense ratios but it moves in my favor after just $30k in assets. Imagine how much you save with $600k in assets.

    2 – Emotion – True investment means picking a business you feel that you would like to offer your cash to for them to use for growth, and being comfortable with that transaction. This is a very personal choice, and offers a level of commitment that should be the principal behind investing. Emotionally, this offers a more stable foundation for wealth-building. Like having equity in the company you work for, you have skin in the game and this affects your choices. Buying an index fund offers no incentives. You are an absentee landlord, collecting small rent checks. If you do not want to get intimate with the ownership your have in specific companies and prefer autopilot, then really you shouldn’t be in the stock market, you should have your money in bonds. The reason most investors freak out and make dumb decisions with their stock holdings is because they have this sense of non-ownership, and the poor incentives that come along with that.

    Overall, it’s sad that public companies, stock ownership, stock markets, and the actual concepts underlying the whole system are divorced completely from what investment is truly all about. It’s not about you. Get over it. It’s about all of us, and providing the capital needed to triumph over the human conditions that defeat us daily. You should be picking your own winners (whether their stock wins is different – vote with your dollars by investing in companies you believe in). Allocating to the broad market is un-ethical since you are just piling more money on those that already have the most (due to market-cap-weighting of the S&P or MSCI, etc). Apple doesn’t need any more of your cash to thrive in the world, but if you happen to think that the team they have there can rally to new important human needs then give them your money. They do not though, need a disproportionate amount of it compared to everyone else.

    Reply
    • Paul B. says

      December 28, 2017 at 9:04 pm

      Hold on now, when you buy a stock, you aren’t giving your money to the company itself. You’re just giving it to the previous owner of that stock. There is one exception I suppose, and that’s if you’re buying an IPO. Am I right here? If I am, then it’s irrelevant whether you believe in a company when you buy its stock.

      Reply
  8. Tim says

    January 3, 2019 at 10:47 am

    Hi JL,

    I really enjoyed this post and may I ask you some questions from the perspective of a career choice:

    Would you recommend people to work in equity investing (picking stocks in one or two industries) related jobs in the asset management companies if active investment management cannot perform better than index fund over the long term? How about the career prospect of working for Private Equity funds or Real Estate funds?

    Many thanks,
    Tim

    Reply
    • jlcollinsnh says

      January 3, 2019 at 1:09 pm

      Interesting question, Tim.

      Years ago I spent a brief time with a research investment firm and while I enjoyed the work I quit over ethical lapses. It remains the only place I’ve ever worked where the CEO gave lessons in how to effectively lie to clients.

      Leaving too soon remains one of my career regrets. I had just begun to develop a reputation I could have parlayed in another year or so into a position with a better firm and more money. This is what my peers, at least those I respected, did. Several went on to have great careers in the field.

      So, if like me, you love this stuff, it is worth looking into. The money can be great and the work interesting. You’ll certainly make far, far, far, far more than blogging about it. 🙂

      Just be aware that it is a field prone to ethical challenges, long hours and it can be brutally competitive.

      Good luck!

      Reply
  9. Matt says

    February 3, 2021 at 6:45 pm

    Hi JL,

    If you bought a dog or two, do you sell at a loss, chalk it up as an educational experience, and take what you have left and put it in an index fund? Or do you go long and hold onto the dogs?

    Thanks from Texas

    Reply
  10. John says

    July 25, 2021 at 10:10 am

    Hi JL,

    Have you ever calculated your stock return during your pre-indexing days and compared it to the index return over that same period? I shared this post with my wife and she asked that question (I don’t think she’s fully convinced that indexing is a better way).

    Best,

    John

    Reply

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  • Stocks — Part II:  The Market Always Goes Up Stocks -- Part II: The Market Always Goes Up
  • Why you need F-you money Why you need F-you money
  • Stocks — Part V:    Keeping it simple, considerations and tools Stocks -- Part V: Keeping it simple, considerations and tools
  • Today Week Month All
  • When Your Country Becomes a Global Outcast When Your Country Becomes a Global Outcast
  • Staying the Course in War-Time Staying the Course in War-Time
  • How I failed my daughter and a simple path to wealth How I failed my daughter and a simple path to wealth
  • VITA, income taxes and the IRS VITA, income taxes and the IRS
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Archives

  • ► 2023 (3)
    • ► January (3)
      • When Your Country Becomes a Global Outcast
      • Staying the Course in War-Time
      • Pathfinders update from Hh
  • ► 2022 (12)
    • ► December (3)
      • A New Chapter for Chautauqua
      • Season's Greetings!!
      • Fun with numbers: Historic Stock Market Returns
    • ► October (1)
      • Let’s talk about what’s up with Bonds, and what ever else you’d like to ask me
    • ► August (1)
      • The Price of Security
    • ► July (1)
      • Case Study #17: Buying into the market right before a Bear
    • ► June (1)
      • Case Study #16: Helping dad with an inheritance
    • ► May (1)
      • Just inked a contract for my next book, and I want you to be a part of it!
    • ► April (1)
      • The Dinky Diner
    • ► March (1)
      • Chautauqua: A terrible business model
    • ► February (2)
      • Chautauqua is back for 2022!
      • JLCollinsnh.com Enters New Era
  • ► 2021 (14)
    • ► December (1)
      • Season's Greetings!!
    • ► November (2)
      • The new book is out!
      • Are bonds done?
    • ► October (1)
      • Guess what I just finally read for the first time...
    • ► September (1)
      • The negligence that led me to DIY investing
    • ► August (3)
      • Chainsaws and Credit Cards
      • Part XXXVI: Estate Planning 101 -- The Simple Path to an Estate Plan
      • The Simple Path to a Lucrative Career
    • ► July (1)
      • Help Wanted: a new book
    • ► June (1)
      • The Top 9 (Bad) Arguments Against Bitcoin
    • ► May (2)
      • Collins on Crypto
      • The Alfred Hitchcock Path to FI
    • ► April (1)
      • Time to sell?
    • ► February (1)
      • Mariah International: All that glitters…
  • ► 2020 (11)
    • ► December (1)
      • Season's Greetings!!
    • ► June (1)
      • How to give when you have a business
    • ► April (4)
      • Investing with Vanguard for Europeans: 2020 update
      • Part XVII-B: ETF vs. Mutual Fund -- What's the difference?
      • Reviewing the comments on my post of April 1st
      • Why I will no longer be writing this blog
    • ► March (4)
      • My move from VMMXX to VBTLX
      • COVID-19: The unvarnished truth from Doc G.
      • Chautauqua sits out 2020
      • Taking advantage of Mr. Bear
    • ► February (1)
      • Mr. Bear, Podcasts, a good book and why I should be in 100% stocks
  • ► 2019 (11)
    • ► November (4)
      • How we bought our new car
      • The House Hacking Strategy
      • What does buying a new car really cost over the years?
      • Why we bought a brand new car
    • ► August (1)
      • A Guided Meditation for When the Stock Market Is Dropping
    • ► June (2)
      • 7 Days in Heaven: or Why Slowing Down Will Get You There Sooner
      • Quit Like a Millionaire
    • ► March (1)
      • Stocks -- Part XXXV: Investing for Seven Generations
    • ► February (1)
      • Chautauqua 2019 - UK & Portugal - Tickets Now Available
    • ► January (2)
      • Mr. Bogle passes
      • "I wanted the unreasonable"
  • ► 2018 (16)
    • ► December (1)
      • Happy Holidays! and a bit on Mr. Market
    • ► November (3)
      • Truly Passive Real Estate Investing
      • Car Talk: An update on Steve and looking at Leafs
      • Chautauqua 2018 Greece: A week for the gods!
    • ► October (1)
      • On Twitter, gone for Chautauqua and dark on comments till November
    • ► September (2)
      • What we own and why we own it: 2018
      • Tuft & Needle: Our Walnut Frame and Mint Mattress
    • ► August (1)
      • Kibanda Part 5: Pretty, and pretty much done
    • ► June (3)
      • Stocks--Part XXXIV: How to unload your unwanted stocks and funds
      • Tracking your holdings
      • Stocks -- Part XXXIII: Optimism
    • ► May (2)
      • Kibanda Part 4: Quicksand!
      • My Talk at Google, Playing with FIRE and other Chautauqua connections
    • ► March (1)
      • Stocks -- Part XXXII: Why you should not be in the stock market
    • ► February (1)
      • Chautauqua 2018: Mt. Olympus, Greece
    • ► January (1)
      • An International Portfolio from The Escape Artist
  • ► 2017 (15)
    • ► December (2)
      • The Bond Experiment: Return to VBTLX
      • How to Invest in Bitcoin like Benjamin Graham
    • ► October (1)
      • Kibanda Part 3: Running the numbers
    • ► September (1)
      • Sleeping soundly thru a market crash: The Wasting Asset Retirement Model
    • ► August (2)
      • Stocks -- Part XXXI: Too hot. Too cold. Not pure enough.
      • Kibanda, Part 2: Negotiating the deal
    • ► July (2)
      • Time Machine and the future returns for stocks
      • Kibanda: Mr. Anti-house buys his dream house
    • ► June (2)
      • Is there an interior designer in the house?
      • The Simple Path to Wealth goes Audio!
    • ► May (1)
      • Life on the Beach
    • ► April (1)
      • Sell! Sell!! Sell!!! Sell?
    • ► March (1)
      • Vicki comes to Chautauqua: United Kingdom
    • ► January (2)
      • Chautauqua - Ecuador 2017 open for reservations
      • Chautauqua - United Kingdom: August 2017
  • ► 2016 (22)
    • ► December (3)
      • Season's Greetings and other cool stuff
      • Angel Investing, or Angel Philanthropy?
      • Mr. Bogle and me
    • ► November (1)
      • Where did you learn about money?
    • ► October (2)
      • Buy Your Freedom; Rent the Rest
      • So, what do you drive?
    • ► September (2)
      • Stocks -- Part XXX: jlcollinsnh vs. Vanguard
      • A visit to the Frugalwoods
    • ► August (1)
      • What the naysayers are missing
    • ► July (1)
      • Reviews of The Simple Path to Wealth; gone for summer
    • ► June (2)
      • The Simple Path to Wealth is now Published!
      • A peek into The Simple Path to Wealth
    • ► May (1)
      • It's better in the wind. Still.
    • ► April (3)
      • Cool things to check out while I'm gone
      • Stocks — Part XXIX: How to save money for college. Or not.
      • Help Wanted: The Book
    • ► March (1)
      • F-You Money: John Goodman v. jlcollinsnh
    • ► February (2)
      • Q&A - V: The Women of Amphissa
      • jlcollinsnh gets a new suit
    • ► January (3)
      • Chautauqua 2015 Reviews, 2016 registration open
      • Case Study #15: The Scavenger Life -- Freedom first, then Financial Independence
      • 3rd Annual (2015) Louis Rukeyser Memorial Market Prediction Contest results, and my forecast for 2016
  • ► 2015 (18)
    • ► December (2)
      • Q&A - IV: Strawberry Patch
      • Seasons Greetings! and other cool stuff
    • ► October (2)
      • Personal Capital; and how to unload your unwanted stocks and funds
      • Stockchoker: A look back at what your investment might have been
    • ► September (2)
      • Case Study #14: To Dream the Impossible Dream (and then realize it)
      • Hotel Living
    • ► August (1)
      • Mr. Market's Wild Ride
    • ► June (4)
      • Gone for Summer, an important note on comments and random cool stuff that caught my eye
      • Around the world with an Aussie Biker
      • Case Study #13: The Power of Flexibility
      • Stocks — Part VIII: The 401(k), 403(b), TSP, IRA & Roth Buckets
    • ► March (2)
      • Stocks -- Part XXVIII: Debt - The Unacceptable Burden
      • Chautauqua October 2015: Times Two!
    • ► February (2)
      • YNAB: Best Place to Work Ever?
      • Case Study #12: Escaping a soul-crushing job before you're 70
    • ► January (3)
      • Case Study #11: John, a small business owner in transition
      • Trish and Stan take an Intrepid Sailing Voyage
      • 2014 Annual Louis Rukeyser Memorial Market Prediction Contest results, and my forecast for 2015
  • ► 2014 (29)
    • ► December (2)
      • Diamonds and Happy Holidays!
      • Micro-Lending with Kiva
    • ► November (3)
      • Chautauqua February 7-14, 2015: Escape from Winter
      • Stocks -- Part XXVII: Why I Don’t Like Dollar Cost Averaging
      • Jack Bogle and the Presidential Medal of Freedom
    • ► October (3)
      • Tuft & Needle: A better path to sleep
      • Nightmare on Wall Street: Will the Blood Bath Continue?
      • Help Wanted
    • ► September (1)
      • Chautauqua 2014: Lightning strikes again!
    • ► August (2)
      • Stocks -- Part XXVI: Pulling the 4%
      • Stocks -- Part XXV: HSAs, more than just a way to pay your medical bills.
    • ► July (3)
      • Stocks -- Part XXIV: RMDs, the ugly surprise at the end of the tax-deferred rainbow
      • Summer travels, writing, reading and other amusements
      • Moto X, my new Republic Wireless Phone
    • ► June (1)
      • Stocks -- Part XXIII: Selecting your asset allocation
    • ► May (1)
      • Stocks -- Part XXII: Stepping away from REITs
    • ► April (3)
      • Q&A III: Vamos
      • Q&A II: Salamat
      • Q&A I: Gaijin Shogun
    • ► March (2)
      • Top 10 posts
      • Cafe No Se
    • ► February (4)
      • Chautauqua 2014 preview, closing up for travel and other random cool things that caught my eye of late.
      • Case Study #10: Should Josiah buy his parents a house?
      • Case Study #9: Lars -- maximizing some good fortune and considering "dollar cost averaging"
      • Case Study #8: Ron's mother - she's doin' all right!
    • ► January (4)
      • roundup: Some random cool things
      • Stocks — Part XXI: Investing with Vanguard for Europeans
      • Case Study #7: What it looks like when everything financial goes wrong
      • 1st Annual Louis Rukeyser Memorial Market Prediction Contest 2013 results, and my forecast for 2014
  • ► 2013 (41)
    • ► December (4)
      • Closing up for the Holidays, see you in 2014
      • Betterment: a simpler path to wealth
      • Case Study 6: Helping an ill and elderly parent
      • Stocks -- Part XX: Early Retirement Withdrawal Strategies and Roth Conversion Ladders from a Mad Fientist
    • ► November (3)
      • Death, Taxes, Estate Plans, Probate and Prob8
      • Case Study #5: Zero to 2.6 million in 25 years
      • Case Study #4: Using the 4% rule and asset allocations.
    • ► October (3)
      • Republic Wireless and my $19 per month phone plan
      • Case Study #3: Let's get Tom to Latin America!
      • The Stock Series gets its own page
    • ► September (2)
      • Case Study #2: Joe -- off to a fast start!
      • Chautauqua 2013: A Week of Dreams
    • ► August (1)
      • Closing up shop plus an opening at Chautauqua, my new podcast, phone, book and other random cool stuff
    • ► July (1)
      • They Will Kill You For Your Shoes!
    • ► June (4)
      • Stocks -- Part VIII-b: Should you avoid your company's 401k?
      • Shilpan's Seven Habits to Live More with Less
      • Stocks -- Part XIX: How to think about money
      • My path for my kid -- the first 10 years
    • ► May (5)
      • Why your house is a terrible investment
      • Stocks — Part XVIII: Investing in a raging bull
      • Dining with the Ghosts of Sarah Bernhardt and Alfons Mucha
      • How we finally got the house sold
      • Stocks — Part XVII: What if you can't buy VTSAX? Or even Vanguard?
    • ► April (4)
      • Greetings from Prague & a computer question
      • Swimming with Tigers, a 2nd chance on the Chautauqua, a financial article gets it wrong and I'm off to Prague
      • Storage, Moving and Movers
      • Homeless, and a bit on the strategy of dollar cost averaging
    • ► March (4)
      • Wild Turkeys, Motorcycles, Dining Room Sets & Greed
      • Roots v. Wings: considering home ownership
      • How about that stock market?!
      • The Blog has New Clothes
    • ► February (5)
      • Meet Mr. Money Mustache, JD Roth, Cheryl Reed & me for a Chautauqua in Ecuador
      • High School Poetry, Carnival, cool ads and random pictures that caught my eye
      • Consignment Shops: Best business model ever?
      • Cafes
      • Stocks -- Part XVI: Index Funds are really just for lazy people, right?
    • ► January (5)
      • Social Security: How secure and when to take it
      • Fighting giraffes, surreal landscapes, dancing with unicorns and restoring a Vanagon
      • My plan for 2013
      • VITA, income taxes and the IRS
      • How to be a stock market guru and get on MSNBC
  • ► 2012 (53)
    • ► December (6)
      • See you next year....until then: The Origin of Life, Life on Other Worlds, Mechanical Graveyards, Great Art, Alternative Lifestyles and Finding Freedom
      • Stocks -- Part XV: Target Retirement Funds, the simplest path to wealth of all
      • Stocks -- Part XIV: Deflation, the ugly escort of Depressions.
      • Stocks Part XIV: Deflation, the ugly escort of Depressions.
      • Stocks -- Part XIII: The 4% rule, withdrawal rates and how much can I spend anyway?
      • How I learned to stop worrying about the Fiscal Cliff and you can too.
    • ► November (2)
      • Rent v. owning: A couple of case studies in Ecuador
      • So, what does a month in Ecuador cost anyway?
    • ► October (4)
      • See you in December....
      • Meet me in Ecuador?
      • The Podcast: You can hear me now.
      • Stocks -- Part XII: Bonds
    • ► September (6)
      • Stocks -- Part XI: International Funds
      • The Smoother Path to Wealth
      • Case Study #I: Putting the Simple Path to Wealth into Action
      • Tales of Bolivia: Calle de las Brujas
      • Stocks -- Part X: What if Vanguard gets Nuked?
      • Travels in South America: It was the best of times....
    • ► August (1)
      • Home again
    • ► June (4)
      • Yellow Fever, closing up shop for the summer and heading to Peru y Bolivia
      • I could not have said it better myself...
      • Stocks -- Part IX: Why I don't like investment advisors
      • Happy Birthday, jlcollinsnh; and thanks for the gift Mr. MM!
    • ► May (6)
      • Stocks -- Part VIII: The 401K, 403b, TSP, IRA & Roth Buckets
      • Mr. Money Mustache
      • The College Conundrum
      • Stocks -- Part VII: Can everyone really retire a millionaire?
      • Stocks -- Part VI: Portfolio ideas to build and keep your wealth
      • Stocks -- Part V: Keeping it simple, considerations and tools
    • ► April (6)
      • Stocks -- Part IV: The Big Ugly Event, Deflation and a bit on Inflation
      • Stocks -- Part III: Most people lose money in the market.
      • Stocks -- Part II: The Market Always Goes Up
      • Stocks -- Part 1: There's a major market crash coming!!!! and Dr. Lo can't save you.
      • You can eat my Vindaloo, mega lottery, Blondie, Noa, Israel Kamakawiwo 'Ole, art, film and a ride on the Space Shuttle
      • Where in the world are you?
    • ► March (7)
      • How I lost money in real estate before it was fashionable, Part V: Sold! and the taxman cometh.
      • How I lost money in real estate before it was fashionable, Part IV: I become a Landlord.
      • How I lost money in real estate before it was fashionable, Part III: The Battle is Joined.
      • How I lost money in real estate before it was fashionable, Part II: The Limits of the Law.
      • How I lost money in real estate before it was fashionable, Part I: Impossibly Naive.
      • You, too, can be conned
      • Armageddon and the value of practical skills
    • ► February (6)
      • Rent v. Owning Your Home, opportunity cost and running some numbers
      • The Casanova Kid, a Shit Knife, a Good Book, Having No Regrets, Dark Matter and a bit of Magic
      • What Poker, Basketball and Mike Whitaker taught me about Luck
      • How to Give like a Billionaire
      • Go ahead, make my day
      • Muk Finds Success in Tahiti
    • ► January (5)
      • Travels with "Esperando un Camino"
      • Beanie Babies, Naked Barbie, American Pickers and Old Coots
      • Selling the House and Adventures in Staging
      • The bashing of Index Funds, Jack Bogle and a Jedi dog trick
      • Magic Beans
  • ► 2011 (22)
    • ► December (1)
      • Dividend Growth Investing
    • ► November (2)
      • The Mummy's head, Particle Physics and "Knocking on Heaven's Door"
      • "It's Better in the Wind" or why I ride a motorcycle
    • ► October (1)
      • Lazy Days and School Days
    • ► July (2)
      • The road to Zanzibar sometimes goes thru Ecuador...
      • Johnny wins the lotto and heads to Paris
    • ► June (16)
      • Chainsaws, Elm Trees and paying for College
      • Stuff I’ve failed at: the early years
      • Snatching Victory from the Jaws of Defeat
      • The. Worst. Used. Car. Ever.
      • Top Ten reasons your future is so bright it hurts my eyes to look at it
      • The Most Dangerous Words Your Customer Can Say
      • How not to drown in The Sea of Assholes
      • What we own and why we own it
      • The Ten Sales Commandments
      • My ever so formal and oh so dry CV
      • How I failed my daughter and a simple path to wealth
      • The Myth of Motivation
      • Why you need F-you money
      • My short attention span
      • Why I can’t pick winning stocks, and you can’t either
      • The Monk and the Minister

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