Category Archive

There is an extremely powerful myth embedded in nearly every individual investor at birth. The myth says you can “trade” your way to millions if you just have the right idea at the right time, if you have just the right technology, or if you could just translate how awesome you are at your day job into “investing.” Sadly, this infection is either outgrown or it lives within its host forever. A good tool to diagnose it is judging your reaction to the commercials below. If they inspire you, you’re in trouble. If you laugh, then you’ve outgrown the myth and probably make sound investing decisions. Here are 2016’s worst financial commercials: Note: Interactive Brokers is missing from the list this year as gesture …

The Wall Street Journal is out with a piece on how interest rates are up, and claims (and pretty much fails) to explain why rates on bank deposits (checking and savings) aren’t up. Here’s an idea about why deposit rates aren’t up, and likely will go up very slowly if rates continue to rise: less competition. The chart above shows how the largest five banks have seen their assets explode higher right along with how much market share they control. Since 1990, you can see the top five went from 10% to roughly 40% of all assets. What’s the big deal about competition for deposit rates? Let’s think about being a banker. If you have less small-to-midsize competitors then it’s …

This story at Bloomberg (courtesy of the Seattle Times) is absolutely amazing. Here’s the rundown: Google purchased an Artificial Intelligence company, Deepmind, and recently told its new system, “save us money on our power bill.” The AI software followed suit and saved Google a ton of money on electricity by intelligently controlling over 100 variables in selected data centers. The software viewed saving power as a game where saving electricity is like scoring points. It learned this system after being taught how to play Atari video games. I couldn’t help but wonder about the implications for investing and financial technology. Isn’t investing just like saving electricity, where “scoring more points” comes from improving a person’s chance of financial success? Is this kind of software …

In case you missed it, here’s my list for 2015’s worst commercials geared toward the average investor. They waited until December, but boy did Interactive Brokers save a doozy of a terrible commercial for us. I think it deserves consideration as 2015’s worst. Check it out: Where do I start?? First, they’re going for the “sophisticated” angle. By having our traders eating late at a fancy restaurant we can only conclude they must be very rich and have access to those super elite financial tools, strategies and products only available to the wealthy. Interactive Brokers clearly wants the audience to see that they provide these tools. Reality: prudent financial tools, strategies and products are the same for everyone, regardless of income or financial …

The stock market had its worst day today since February, 2014. Here’s how you should feel about it: Here’s how many people feel about it: Here’s what they’ll do about it: Here’s what you should do about it: Impulse is not rewarded in financial markets so just keep sleeping easy for exactly one reason: patience is a highly compensated activity.