In Plus episode 441, we consider the economic impact of private-sector fixed-rate debt versus variable-rate debt. We discuss the Bank of Japan's apparent abandoning of yield curve control. When Treasury bondholders have to pay capital gains tax. Finally, we analyze activist short sellers. … [Read more...]
285: Money is Debt
Money can be used to purchase things now or saved to purchase things later. If individuals want to save their money to purchase things in the not too distant future, they can invest in what are known as cash equivalents. These include savings accounts at banks or money market mutual funds. Cash equivalents pay a little bit of interest while also having price stability in that the value of deposits varies little from day-to-day. Money Is Debt Backed By Debt Gary Gorton, Professor of … [Read more...]
194: Four Investment Lessons From Warren Buffett
Four investment lessons from Berkshire Hathaway's fiscal year 2017 Shareholder Letter with additional insights from Howard Marks and Seth Klarman. Photo by Aleski Tappura In this episode you’ll learn: Why margin loans are dangerous and how Warren Buffett safely uses debt to fund investments.Why we need to invest with our eyes open, focusing on a few fundamentals.Why we need to stick with easy decisions and avoid excessive trading.Why we need to be willing to be early … [Read more...]
188: Should You Pay Off Debt or Invest?
When should you pay off debt versus investing. Why stocks are not less risky the longer you own them, but younger investors should still own more in stocks. How to invest a lump sum payment. Photo by Tim Gouw In this episode you’ll learn: How net worth consists of both financial capital and human capital.What is the financial return for college.How does asset liability matching apply to mortgages and student loans.How to decide whether you should invest a lump sum … [Read more...]