In his 1929 book The Thing, British philosopher G.K. Chesterton introduced an idea that is now known as “Chesterton’s fence.” Here’s how he explained it. Imagine two people walking along a road when they discover a fence blocking the way for no apparent reason. As Chesterton tells it, the first [...]
What the Data Says
In the investment world, there’s no shortage of data. But how useful is it? To help get to an answer, let’s consider these four questions: When the economy is strong, is that good for stocks? The simple answer is yes. According to textbook finance, the value of any company should represent the [...]
New thinking
Among the quotes attributed to Mark Twain is this one: “It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so.” This highlights one of the challenges of personal finance: that the data and the conclusions we rely on for decision-making can never [...]
Avoiding errors
On April 1, 1976, Steve Jobs and Steve Wozniak founded Apple Computer. What’s less well known is that originally there was a third co-founder, an engineer named Ronald Wayne. Wayne’s tenure at the company was short, though. Concerned by the risk—and by Jobs’s personality—Wayne sold his stake in the [...]
The center lane
What’s the first rule in personal finance? My suggestion: Always look for ways to stay in the center lane—that is, to take a balanced approach. As the new year gets started, here are 10 ways you could apply this principle. Housekeeping. Over time, many of us accumulate a mixed bag of investment [...]
