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November 9 · Issue #2 · View online
Investors Therapy is a newsletter, from the Silicon Valley Investors Club (svinvestorsclub.com), that helps investors understand their psychology so they can make smarter investment decisions. If you're ready to take the next step in your investment journey, subscribe!
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Hey Everyone,
As the saying goes, “there’s no such thing as a free lunch.” Well, the same can be said for investing in dividend paying stocks. We assume if we invest in blue chip dividend stocks, we should expect a nice risk-free yield of 1-3%. But as soon as the dividend is called into question, the stock price could plunge (see GE), resulting in a shrinking yield and a costly correction. The dividend yield you’re receiving is a payment for the risk you are taking assuming the company will be able to maintain its pricing power in the market, generate enough money to cover it’s operational costs, and have funds left over to pay out a dividend. Don’t trick yourself into thinking the dividend yield is a free lunch.
Cheers, Jordan PS - Well, we’ve hit 153 members! Take a bow everyone! If you know of anyone else who can benefit from the newsletter, please share it. I wouldn’t mind if you gave my digest some love through Twitter or Facebook :-)
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Mass Psychology Supports the Pricey Stock Market - The New York Times
Stock prices are high but an expert on bubbles says the psychological underpinnings of this market appear to be different from those of 1929 or 2000.
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The mechanics of motivational reasoning
Why we like to make decisions and then rationalized them after or believe what we want to believe (confirmation bias). This is directly applicable to investing.
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The Full Reset · Collaborative Fund
This is true for big theories, too. Investor Dean Williams once wrote: “Expertise is great, but it has a bad side effect. It tends to create an inability to accept new ideas.” Those who learned how to invest in the ‘70s and ‘80s never quite shook the idea that low inflation could persist as long as it has. Those who invested through the late ‘90s will perpetually see a bubble in anything that trades over 20 times earnings. Anyone under age 25 will have an easier time seeing the potential of blockchain than those over age 55. Same was true for the internet 30 years ago.
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An Investing Scorecard With a Blank Space - Bloomberg Gadfly
Actively managed mutual funds with lower fees and high manager ownership have beaten their benchmarks in greater numbers
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General Electric stock dives on fear of dividend cut - The Washington Post
Pensioners, savers and investors have for decades relied on the success of the GE share price and its clockwork payouts of dividends.
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Considerations for Cashing Out of the Stock Market
There was a story in CNN Money last week about a 60-something part-time writer/librarian who cashed out all of the money she had in the stock market. Here’s what she did with it along with her reasoning behind the decision:
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How Valuable Is a Unicorn? Maybe Not as Much as It Claims to Be - The New York Times
A new study by a pair of professors concludes that many so-called unicorn companies are worth half of what is commonly reported for their valuation.
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Why Successful Startups Stumble at 40+ Employees – ThinkGrowth.org
Last week I got a call from Patrick an ex-student I hadn’t heard from for 8 years. He was now the CEO of a company and wanted to talk about what he admitted was a “first world” problem. Over…
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Whatever happened to “venture is hard” ? – The Startup – Medium
I’m scratching my head. It seems that with the overwhelming notion that “software is eating the world” pretty much everyone is starting a venture fund… or doing an ICO. Somehow you’re led to believe…
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It's Beginning To Look A Lot Like 1937 - SPDR S&P 500 Trust ETF (NYSEARCA:SPY) | Seeking Alpha
No, not like 1929, 1987, 2001 or 2007. I’ve seen many analyses comparing this economic cycle with those that have ended in tears. Well, I’m no different. The ma
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Our Biggest Economic, Social, and Political Issue The Two Economies: The Top 40% and the Bottom 60%
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America’s ‘Retail Apocalypse’ Is Really Just Beginning
The spillover from retailer debt will flow far and wide across the economy.
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Bay Area hammered by monthly loss of 4,700 jobs
Employers in the Bay Area slashed thousands of jobs during September, employment setbacks that come with the crucial holiday shopping and hiring season nearing.
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Nearly half of nation’s largest 50 metros reach overvalue point | 2017-11-07 | HousingWire
Home prices increased across the nation, causing nearly half of the nation’s top 50 markets to become overvalued, according to the latest Home Price Index from CoreLogic, a property information, analytics and data-enabled solutions provider. The HPI showed home prices increased 7% from September 2016 to September 2017 and 0.9% from August. And CoreLogic predicts this increase will continue, but at a slower pace with an increase of 4.7% from September 2017 to September 2018 and an increase of 0.1% by October this year, according …
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Rising Rents Are Pushing More Tenants Past the Breaking Point - Bloomberg
Rents have increased rapidly across U.S. housing markets as the share of renting households has risen faster than the number of new units. Now, in a survey published Thursday by an apartment-listing service, nearly one in five respondents reports struggling to make the monthly payments.
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Airbnb NYC | Rent Increases NYC
A new study from the University of California Los Angeles has found that Airbnb pushes up rents and worsens housing affordability in the city.
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'The housing market can't take the shock of a natural event,' Redfin economist warns
Given the acute construction labor shortage, reconstruction and its repercussions in residential real estate could be yet another disaster.
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Google's San Jose village construction has 2025 time frame
A Google village that could bring 20,000 employees of the tech giant to downtown San Jose now has a “main construction” time frame of nearly a decade from now.
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U.S. Homes Are Getting Snapped Up at the Fastest Pace in 30 Years - Bloomberg
The typical U.S. home lasted just three weeks on the market, according to a new report.
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Aswath Damodaran: "The Value of Stories in Business" | Talks at Google - YouTube
The world of investing/finance is divided into two camps. In one, you have the number-crunchers, who believe that the only things that matter are the numbers…
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If you like what you read and you want it delivered to your inbox subscribe to my newsletter or share it with your friends. This newsletter is one of the two newsletters I write reach month. If you’re interested in a newsletter on career advice, society, interviews with thought leaders, and free chapters from great books, click here to read my second newsletter. If you have any articles I should check out, please email me at jt@growwithjordan.com
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