lessons learned...............

      The judicious will not fail to extract other lessons from the two conventions.  For example, the lesson that politicians, in the main, are poor hands at practical politics—that their professional competence is very slight.  Very few of them, indeed, show any sign of ordinary good sense.  Their tricks are transparent and deceive no one, not even other politicians.  When they accomplish anything, it is usually by accident.

-Henry Louis Mencken, from a 7/14/1924 essay

Wait a minute...............................

 ................................is common sense showing up in the unlikeliest of places?

Common Sense..................

  PERHAPS the sentiments contained in the following pages are not yet sufficiently fashionable to procure them general favor. A long habit of not thinking a thing wrong gives it a superficial appearance of being right, and raises at first a formidable outcry in defense of custom. But the tumult soon subsides. Time makes more converts than reason.

-Thomas Paine, from the Introduction to Common Sense

Philosophy acts as the glue.............

It's not always easy to define yourself as an investor.  There are so many labels out there that it can be hard to keep up—value investor, short-term trader, index investor, active investor, diversified asset allocator, buy, hold, and rebalance, trend follower, tactical, quantitative/systematic, technical analysis, risk parity, and the list could go on.   There's no right or wrong answer for every single individual.  What matters is what works for you.
     There's never going to be a one-size-fits-all investment philosophy for every person.  We all have different strengths and weaknesses.  You have to find a belief system that fits your own personality.  You can't force a square peg through a round hole just because you want to make something work for you.  This will only compound your issues. . . .
     Regardless of the strategy you implement, the true test of your beliefs will always come at those times when it's not working.  These are the times when you investment philosophy should help.
     Inventor and author Rick Ferri summed this up nicely when he said, "Philosophy is universal; strategy is personal; and discipline is required.  Philosophy acts as the glue that holds everything together.  Philosophy first, strategy second and discipline third.  These are the key to successful  investing."

-Ben Carlson, as extracted from A Wealth of Common Sense

Tougher than it looks........................

Most people will get much more out of destroying their own wrong ideas than trying to come up with new ones all the time.  Once you get rid of the clutter, all that's left will be the good stuff that you can use to improve your results.

-Ben Carlson, from A Wealth of Common Sense

Learning lessons.................

     I paid my tuition to the market and experienced some losses, but it was worth it because I came to the realization that I didn't have to become an extraordinary investor to be successful.  And by trying to become an extraordinary investor it only made things worse.  The harder you try to become the world's best investor, the easier it is to become on of the worst. . . .
     The interesting thing about very intelligent and successful people is that they're usually the ones who have figured out the making things simple is the correct path to success.

-Ben Carlson,  A Wealth of Common Sense

Opening paragraphs.....................

      Some writers have so confounded society with government, as to leave little or no distinction between them; whereas they are not only different, but have different origins. Society is produced by our wants, and government by our wickedness; the former promotes our happiness possitively by uniting our affections, the latter negatively by restraining our vices. The one encourages intercourse, the other creates distinctions. The first is a patron, the last a punisher.

      Society in every state is a blessing, but Government, even in its best state, is but a necessary evil; in its worst state an intolerable one: for when we suffer, or are exposed to the same miseries by a Government, which we might expect in a country without Government, our calamity is heightened by reflecting that we furnish the means by which we suffer. Government, like dress, is the badge of lost innocence; the palaces of kings are built upon the ruins of the bowers of paradise. For were the impulses of conscience clear, uniform and irresistibly obeyed, man would need no other law-giver; but that not being the case, he finds it necessary to surrender up a part of his property to furnish means for the protection of the rest; and this he is induced to do by the same prudence which in every other case advises him, out of two evils to choose the least. Wherefore, security being the true design and end of government, it unanswerably follows that whatever form thereof appears most likely to ensure it to us, with the least expence and greatest benefit, is preferable to all others.

-Thomas Paine,  Common Sense

I really like Ben Carlson...............

....If you aren't reading his blog, well, feel free to start now.   Here is a for instance of his common sensical thinking:

5. There isn’t just one reason. Narratives about what caused the market correction can be fun to argue about but there’s never just one reason for something like this. The president or the Fed or the tariffs or algorithmic trading strategies or the month of December or Taylor Swift’s deafening silence on the trade war didn’t cause this downturn.

Markets are made up of millions of investors, all with different goals, objectives, time horizons, risk profiles, and temperaments. No one person or office or investment strategy can control these millions of moving parts.

The poet Frank Bidart once wrote, “Insanity is the insistence of meaning.” He may have been talking about the movements of the stock market.

Seems unlikely.....................

     The world since 1914 has developed in ways very different from what I should have desired.  Nationalism has increased, militarism has increased, liberty has diminished.  Large parts of the world are less civilized than they were.  Victory in two great wars has much diminished the good things for which we fought.   All thinking and feeling is overshadowed by the dread of a new war worse than either of its predecessors.  No limit can be seen to the possibilities of scientific destruction.  But, in spite of these causes for apprehension, there are reasons, though less obvious ones, for cautious hope.  It would now be technically possible to unify the world and abolish war altogether.  It would also be technically possible to abolish poverty completely.  These things would be done if men desired their own happiness more than the misery of their enemies.  There were, in the past, physical obstacles to human well-being.  The only obstacles now are in the souls of men.  Hatred, folly and mistaken beliefs alone stand between us and the millennium.  While they persist, they threaten us with unprecedented disaster.  But perhaps the very magnitude of the peril may frighten the world into common sense.

-Bertrand Russell, from his essay "From Logic To Politics in Portraits From Memory and Other Essays.  Russell (1872-1970) published this book in 1951.

Data over dogma................

"The best investment advice often comes from books that have little to do with money."

-Tony Isola, as culled from here

Organized common sense..................

     "But is there still enormous gain to be made with organized common sense that doesn't require a computer?  I think the answer is 'yes.'  Are there dangers in getting too caught up in the minutiae of using a computer so that you miss the organized common sense?  There are huge dangers.  There'll always be huge dangers.  People calculate too much and think too little."

-Charlie Munger

Yet............................

"Remember that computers have no common sense."

-Ray Dalio

Undulate.................

"I get tired of either sense or nonsense if I am kept continuously to either and like my mind to undulate between the two as it likes best."

-Walter Bagehot

Common sense..........................

...........................................................and a simple question.

This has a ring of truth to it..........

The utter contempt with which privileged Eastern liberals such as myself discuss red-state, gun-country, working-class America as ridiculous and morons and rubes is largely responsible for the upswell of rage and contempt and desire to pull down the temple that we're seeing now.

I've spent a lot of time in gun-country, God-fearing America. There are a hell of a lot of nice people out there, who are doing what everyone else in this world is trying to do: the best they can to get by, and take care of themselves and the people they love. When we deny them their basic humanity and legitimacy of their views, however different they may be than ours, when we mock them at every turn, and treat them with contempt, we do no one any good. Nothing nauseates me more than preaching to the converted. The self-congratulatory tone of the privileged left—just repeating and repeating and repeating the outrages of the opposition—this does not win hearts and minds. It doesn't change anyone's opinions. It only solidifies them, and makes things worse for all of us. We should be breaking bread with each other, and finding common ground whenever possible. I fear that is not at all what we've done.

-Anthony Bourdain, as culled from here.  As they say, read the whole thing.

via

Shape............................

Habits are powerful, but delicate.  They can emerge outside our consciousness, or can be deliberately designed.  They often occur without our permission, but can be reshaped by fiddling with their parts.  They shape out lives far more than we realize - they are so strong, in fact, that they cause our brains to cling to them at the exclusion of all else, including common sense.

-Charles Duhigg,  The Power of Habit:  Why We Do What We Do in Life and Business

It might be common-sense.....................

.......................................................but I never looked at this way:

A homeowner is both landlord and tenant in her own property.  A rise in house prices increases the wealth of the homeowner as landlord but increases the implicit rent paid by the owner-occupier as tenant.  That is an economist's way of expressing the common-sense observation that a rise in the price of a home that you own does not mean that you will now be able to afford a new car or expensive holidays.

-Mervyn King,  The End of Alchemy:  Money, Banking, and the Future of the Global Economy

When you write stuff like this...........

....................no one complains that you've named your blog, A Wealth of Common Sense:

Over the last 90 years or so the market have been in a bear market almost one-quarter of the time. Half the time you’re down 5% or worse. It’s difficult to appreciate this fact when looking at a long-term log scale stock chart that seems to only go up and to the right.

This is why stocks are constantly playing mind games with us. They generally go up but not every day, week, month or year.

No one can predict what the future returns will be in the market. No one knows what the future holds for economic growth. And we certainly can’t predict how investors will decide to price corporate cash flows at any given point in time out into the future.

But predicting future risk is fairly easy — markets will continue to fluctuate and experience losses on a regular basis. As an investor in stocks you will spend a lot of time second-guessing yourself because your portfolio has fallen in value from a previously seen higher level.

In a sense risk is easier to predict than returns.

Market losses are the one constant that don’t change over time — get used to it.

Tincture of philosophy................

"The man who has no tincture of philosophy goes through life imprisoned in the prejudices derived from common sense, from the habitual beliefs of his age or his nation, and from convictions which have grown up in his mind without the co-operation or consent of his deliberate reason.  To such a man the world tends to become definite, finite, obvious;  common objects rouse no questions, and unfamiliar possibilities are contemptuously rejected...[But Philosophy] keeps alive our sense of wonder by showing familiar things in an unfamiliar aspect."

-Bertrand Russell

Can I get an amen.......................................?

"We need less financial ingenuity and more common sense."


-John Kay, as extracted from here