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December 2, 2014

Jonathan Tobin: Defending the Right to a Jewish State

Heather Hale: Compliment your kids without giving them big heads

Megan Shauri: 10 ways you are ruining your own happiness

Carolyn Bigda: 8 Best Dividend Stocks for 2015

Kiplinger's Personal Finance editors: 7 Things You Didn't Know About Paying Off Student Loans

Samantha Olson: The Crucial Mistake 55% Of Parents Are Making At Their Baby's Bedtime

Densie Well, Ph.D., R.D. Open your eyes to yellow vegetables

The Kosher Gourmet by Megan Gordon With its colorful cache of purples and oranges and reds, COLLARD GREEN SLAW is a marvelous mood booster --- not to mention just downright delish
April 18, 2014

Rabbi Yonason Goldson: Clarifying one of the greatest philosophical conundrums in theology

Caroline B. Glick: The disappearance of US will

Megan Wallgren: 10 things I've learned from my teenagers

Lizette Borreli: Green Tea Boosts Brain Power, May Help Treat Dementia

John Ericson: Trying hard to be 'positive' but never succeeding? Blame Your Brain

The Kosher Gourmet by Julie Rothman Almondy, flourless torta del re (Italian king's cake), has royal roots, is simple to make, . . . but devour it because it's simply delicious

April 14, 2014

Rabbi Dr Naftali Brawer: Passover frees us from the tyranny of time

Greg Crosby: Passing Over Religion

Eric Schulzke: First degree: How America really recovered from a murder epidemic

Georgia Lee: When love is not enough: Teaching your kids about the realities of adult relationships

Cameron Huddleston: Freebies for Your Lawn and Garden

Gordon Pape: How you can tell if your financial adviser is setting you up for potential ruin

Dana Dovey: Up to 500,000 people die each year from hepatitis C-related liver disease. New Treatment Has Over 90% Success Rate

Justin Caba: Eating Watermelon Can Help Control High Blood Pressure

The Kosher Gourmet by Joshua E. London and Lou Marmon Don't dare pass over these Pesach picks for Manischewitz!

April 11, 2014

Rabbi Hillel Goldberg: Silence is much more than golden

Caroline B. Glick: Forgetting freedom at Passover

Susan Swann: How to value a child for who he is, not just what he does

Cameron Huddleston: 7 Financial Tasks You Should Tackle Right Now

Sandra Block and Lisa Gerstner: How to Profit From Your Passion

Susan Scutti: A Simple Blood Test Might Soon Diagnose Cancer

Chris Weller: Have A Slow Metabolism? Let Science Speed It Up For You

The Kosher Gourmet by Diane Rossen Worthington Whitefish Terrine: A French take on gefilte fish

April 9, 2014

Jonathan Tobin: Why Did Kerry Lie About Israeli Blame?

Samuel G. Freedman: A resolution 70 years later for a father's unsettling legacy of ashes from Dachau

Jessica Ivins: A resolution 70 years later for a father's unsettling legacy of ashes from Dachau

Kim Giles: Asking for help is not weakness

Kathy Kristof and Barbara Hoch Marcus: 7 Great Growth Israeli Stocks

Matthew Mientka: How Beans, Peas, And Chickpeas Cleanse Bad Cholesterol and Lowers Risk of Heart Disease

Sabrina Bachai: 5 At-Home Treatments For Headaches

The Kosher Gourmet by Daniel Neman Have yourself a matzo ball: The secrets bubby never told you and recipes she could have never imagined

April 8, 2014

Lori Nawyn: At Your Wit's End and Back: Finding Peace

Susan B. Garland and Rachel L. Sheedy: Strategies Married Couples Can Use to Boost Benefits

David Muhlbaum: Smart Tax Deductions Non-Itemizers Can Claim

Jill Weisenberger, M.S., R.D.N., C.D.E : Before You Lose Your Mental Edge

Dana Dovey: Coffee Drinkers Rejoice! Your Cup Of Joe Can Prevent Death From Liver Disease

Chris Weller: Electric 'Thinking Cap' Puts Your Brain Power Into High Gear

The Kosher Gourmet by Marlene Parrish A gift of hazelnuts keeps giving --- for a variety of nutty recipes: Entree, side, soup, dessert

April 4, 2014

Rabbi David Gutterman: The Word for Nothing Means Everything

Charles Krauthammer: Kerry's folly, Chapter 3

Amy Peterson: A life of love: How to build lasting relationships with your children

John Ericson: Older Women: Save Your Heart, Prevent Stroke Don't Drink Diet

John Ericson: Why 50 million Americans will still have spring allergies after taking meds

Cameron Huddleston: Best and Worst Buys of April 2014

Stacy Rapacon: Great Mutual Funds for Young Investors

Sarah Boesveld: Teacher keeps promise to mail thousands of former students letters written by their past selves

The Kosher Gourmet by Sharon Thompson Anyone can make a salad, you say. But can they make a great salad? (SECRETS, TESTED TECHNIQUES + 4 RECIPES, INCLUDING DRESSINGS)

April 2, 2014

Paul Greenberg: Death and joy in the spring

Dan Barry: Should South Carolina Jews be forced to maintain this chimney built by Germans serving the Nazis?

Mayra Bitsko: Save me! An alien took over my child's personality

Frank Clayton: Get happy: 20 scientifically proven happiness activities

Susan Scutti: It's Genetic! Obesity and the 'Carb Breakdown' Gene

Lecia Bushak: Why Hand Sanitizer May Actually Harm Your Health

Stacy Rapacon: Great Funds You Can Own for $500 or Less

Cameron Huddleston: 7 Ways to Save on Home Decor

The Kosher Gourmet by Steve Petusevsky Exploring ingredients as edible-stuffed containers (TWO RECIPES + TIPS & TECHINQUES)

Jewish World Review

The things you shouldn't pay attention to

By Morgan Housel





If you want to do well, don't waste your time trying to be intelligent


JewishWorldReview.com | "It is remarkable how much long-term advantage people like us have gotten by trying to be consistently not stupid, instead of trying to be very intelligent." -- Charlie Munger

There are 315 million people and 13 million businesses in America. The tax code is 73,000 pages long. Visa and MasterCard process 4,000 transactions per second. Forty-seven million Americans are on food stamps; the 400 richest Americans are worth $2 trillion; 254 million antidepressant prescriptions are written annually; and in the time it took me to write this paragraph, 13 Americans filed for bankruptcy, 22 were married and 21 died.

The economy is so complex it is literally unfathomable. There are trillions of moving parts reacting to each other every second, often without making any sense or having any historical precedent.

One of the most dangerous things you can do is pretend the economy, or the stock market, is simple and easy to understand. It causes you to see patterns that are really just random flukes, and wrongly assume that if one lever is pulled over here, something predictable will happen over there. This is one reason clueless, passive investors often outperform professional ones. Clueless investors aren't tempted by false insight masquerading as brilliance.

So take Munger's advice. If you want to do well, don't waste your time trying to be intelligent. Forget searching for patterns and correlations you think might explain the future. Instead, avoid being stupid by realizing what doesn't work and what you shouldn't pay attention to.

Take three examples:

The economy and the stock market

Do you want to know where the stock market is going next? I bet you do. And I bet you think that the stronger the economy is, the higher the market will go.

But that isn't necessarily the case. What the economy does today tells you nothing about what stocks might do tomorrow.



If you're a math geek, the correlation between current GDP growth and five-year subsequent stock returns is -0.06, or pretty much a random, drunk walk. Three-year forward-looking market returns aren't much different, at -0.09. For one-year returns, it's -0.21 -- still low.

This goes deeply against intuition. Most of us want to believe that market returns are driven by a strong economy and corporate profit growth. In the long run, they are. But the two don't move in lockstep. Markets are priced based on what people think will happen in the future. Today's reality is yesterday's news. That's why stocks surged in 2009 even though the economy was a complete wreck.

A lot of investors understand this. But read through explanations of why people want out of stocks, and you often get the same story: The economy's weak, unemployment's high, housing's a mess -- all of which may be true, but none of which may be relevant to investment returns. Save yourself some misery and stop paying attention to it.

ECONOMIC DATA
Want to know what the economy is doing right now? Pay no attention to initial economic reports. They will eventually be revised so many times that the only thing we know with confidence is that they are wrong.

Take the monthly jobs report, one of the most anticipated numbers of the month. Each report is revised seven times after its initial release; twice in the following two months and once a year for five years after that. Deutsche Bank economist Joe LaVorgna tallied up all past revisions and found the average jobs report is revised up or down by 90,000 jobs, or nearly half the average initial number.

If I told you the temperature outside is 70 degrees, give or take 30 degrees, you'd know it's a useless figure and has no connection to the actual weather. And you definitely wouldn't act on it, putting on a heavy jacket when it might be 100 degrees outside. But we treat economic numbers with the same margin of error as stone-cold fact -- and we often act on them. Watch the madness of people frantically trading stocks after the initial jobs report is released. They are basically reacting to a coin toss. Do yourself a favor and don't follow them.

THE ECONOMY AND TAXES
Want to know where the economy is headed next? Don't pay much attention to politics, especially tax rates.

This sounds crazy. Higher taxes take money out of the hands of productive workers.

But look at the evidence, and what seems obvious in theory is elusive in practice.


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Take the top marginal tax rate and compare it to GDP growth. You get a big mess without much rhyme or reason. The best explanation is that the advertised tax rate and the actual amount of taxes people pay are wildly different. Marginal tax rates apply only to a small segment of income, and deductions, write-offs and loopholes can render them meaningless.

The United States has one of the highest corporate tax rates in the world, yet one of the lowest rates of corporate tax collection as a share of GDP. The top marginal income tax rate was 70 percent in 1981, and the average actual (effective) tax rate of top earners was 30.4 percent. By 2004 the top rate was cut in half, to 35 percent, but the average effective rate of top earners was barely changed, at 30.1 percent.

There is a huge difference between tax rates and the rate of tax collection. As long as that's the case, claims that raising/lowering marginal rates will hurt/help economic growth have to include an asterisk that says, "All else equal, which it never is, and even then, maybe, maybe not." There's just not a lot of evidence either way. I know of no one who has correctly called the direction of the economy or the stock market based on changes in tax rates, but I know many who have erred disastrously in their attempts. Most tax debates have more to do with political philosophy than economics. Keep your distance if you're interested in making money.

Most financial advice tries to make people better investors. I've come to the conclusion that it's more helpful to focus on how to become a less-bad investor. Realizing what we shouldn't do, and shouldn't pay attention to, is a good first step.

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Morgan Housel, a columnist at The Motley Fool, is a two-time winner, Best in Business award, Society of American Business Editors and Writers and Best in Business 2012, Columbia Journalism Review.


Previously:


Putting a gap between you and stupid

8 fascinating financial insights from latest Nobel Prize-winner

Investing like a psychopath

Why you're so bad with your money

8 questions you might have about the debt ceiling

An open letter to everyone under age 30

15 biases that make you do dumb things with your money

If this scares you, you shouldn't be investing

What I plan to do when the market crashes

The three most important words in investing

Monkeys and investing

Two types of risk, two types of bubbles

The secret to financial success: Use ignorance to your advantage

How to effectively fight investors' greatest enemy

Four mistakes that make everyone a bad investor

Learning from the past, and the Next Big Tren

What newspapers were saying when you should have been buying

Why you never learn from your investment mistakes

The curse of success, and why most mutual funds fail miserably

If you know only five things about investing, make it these

Why spotting bubbles is so much harder than you think

When smart investors do stupid things

The deep downside of home ownership

The biggest retirement myth ever told

He's rich, smart and old: Listen to him

Admit it: No one has any idea what's going on

Gold collapse: The start of something big?

BAD NEWS: EVERYONE IS RIGHT!

Twitter: The carnival barker of investing

Warning: Don't waste your capital being fooled by profit prophets

25 important things to remember as an investor

New paradigm for both drivers and car companies

Biases that make you a bad investor

Nine financial rules you should never forget

Gaining from financial destruction

How to read financial news

Housing: Partying like it's 1925

A rebuttal to student loan horror stories

CONGRATULATIONS: We just saved half a trillion dollars

End this crazy tax: It will boost the economy

Medicare: A dangerously good deal

Economic future looks bright

The Biggest Threat to Your Portfolio (It's Not What You Think)

Bond Market Bull Run dead at 30



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