The Stingy News Weekly (01/15/2012)
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The scourge of inflation
"Inflation is the silent killer of retirement dreams. It sneaks in over the years and nibbles away at nest eggs, leaving people poorer than they once thought. How does it do the dastardly deed? By reducing the purchasing power of money over time."
The rise of the new groupthink
"Our companies, our schools and our culture are in thrall to an idea I call the New Groupthink, which holds that creativity and achievement come from an oddly gregarious place. Most of us now work in teams, in offices without walls, for managers who prize people skills above all. Lone geniuses are out. Collaboration is in. But there’s a problem with this view. Research strongly suggests that people are more creative when they enjoy privacy and freedom from interruption. And the most spectacularly creative people in many fields are often introverted"
Should you hold bonds in taxable accounts?
"Investors fortunate enough to have money to save and invest over and above their RRSP and TFSA contributions need both asset allocation and asset location strategies. The standard advice is to stuff all of the bonds in RRSP, TFSA and similar accounts to defer or shelter tax on interest income (otherwise 100% taxable). Similarly, stocks usually dominate non-registered accounts because they generate more lightly-taxed capital gains and (in the case of Canadian stocks) dividends. But with bond yields having fallen (i.e. bond prices having risen) in the face of weak stock prices, this traditional asset location advice may not hold for everyone."
What zero bound?
"Negative interest rates are a big puzzle. Easy stories miss the point: 'flight to quality,' 'need for collateral,' etc. Those stories don't explain why bonds are worth more than money."
The economist zone
"Screen shifts to a sharp man with a cigarette. He begins to speak. “Picture a world, where people only eat apples. A man consults alleged experts on government deficits, and is taken on a journey that ultimately shatters his mind–a journey that ends, in the Economist Zone.”"
Warren Buffett’s Bizarre Non-Sequitur
"In other words, the entire Republican point is “We don’t want to pay any more in taxes, if you think you aren’t taxed enough, then you are free to pay more in taxes.“ Thus, calling out Mitch McConnell like this, while sure to grab headlines, and result in high fives and “Oh no you di’ints” amongst liberals, makes no sense"
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