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The Sunday Best is a collection of articles I’ve curated from the furthest reaches of the internet for your reading pleasure.
Every week, I scan hundreds of headlines, read dozens of posts, and bring you the best of the best to save you time and mental energy.
Financial Independence (FI) is a primary focus, but it’s an awfully broad topic. I tend to approach FI and early retirement from a fatFIRE perspective and through the lens of a physician, so expect to see those biases in the selected articles.
For more great articles, take a peek at The Sunday Best Archives. Now let’s get to the best… The Sunday Best!
The Sunday Best
When building wealth, it helps to be mindful of how different asset classes have performed over time. Karl Steiner of Mindfully Investing has been busy Ranking The Historical Returns of Asset Classes.
Why build wealth? Perhaps you don’t know what life has in store for you. Chris, a business economics major and recently diagnosed Type I diabetic who blogs at Life Upswing, knows about the curveballs life can throw at you. 5 Retirement Planning Tactics to Aid Your FIRE Journey.
Play your cards right, and you might end up with more money than you know what to do with. That’s not always a good thing according to Mark Laforet of Money’s the Game. You know, mo’ money, mo’ problems, and all. 11 Unanticipated Disadvantages Of Having Too Much Money.
Having too much money riding on the possibility of your untimely demise could be a problem, too. Mitigate the issue with a clever laddering strategy to lower the bounty on your head as your wealth builds. A FIRE-Minded Approach to Life Insurance that will save you money.
Gamestop, AMC, Dogecoin, oh my! It was a wild week for the home run hitters, but someone’s bound to be left holding the bag. The Physician Philosopher and Ryan Inman discuss Why Hitting Home Runs Isn’t the Best Way to Generate Wealth on Money Meets Medicine episode 53.
When charts plotting investment returns go vertical, you’re likely looking at a bubble. What about a chart that has flatlined? Ben Carlson of A Wealth of Common Sense looks at some markets and market sectors that have not been hyped on r/wallstreetbets. Markets That Are Definitely NOT In a Bubble.
If you’re not getting your investing info from Reddit, where should you go instead? Financial Advisor Fred Leamnson of Your Money Geek highlights The 47 Best Personal Finance Blogs of 2021 (and Why You Should Read Them).
You may know your total net worth, but have you calculated your liquid net worth? Kevin at Just Start Investing explains the difference and how to measure it. Liquid Net Worth: What it is and How to Calculate Yours.
It turns out that the 529 Plan I’ve been investing in since my boys were babies is now considered the #1 plan in the nation. The White Coat Investor counts down the Top 10 along with some runners up in the Best 529 Plans for 2021: Reviews, Ratings, and Rankings.
The Young Gunz took on the Suits this week, and the results were phenomenal. Gamestop, a business with an uncertain future as malls and video game cartridges and discs go the way of Dinosaur Jr., was taken from a few bucks last March to under $20 earlier in January to $325 at the market close Friday.
Other so-called “meme stocks,” many of which represent companies similarly losing relevancy like Blackberry, Nokia, and AMC movie theaters, saw unanticipated spikes this last week. Unanticipated by most, at least, but may not to the Redditors collaborating at r/wallstreetbets.
What in the hell happened here?
Here’s my understanding. Some large hedge funds, a.k.a. the Suits, are publicly known to hold short positions, betting on a price drop, in a number of the aforementioned stocks. Essentially, they’ve borrowed shares of these stocks, sold them, and if they can buy shares of them back at a lower price to return them the shareholders from whom they borrowed, they’ll make a pile of money.
Retail investors, communicating online via Reddit and social media, collectively decided to bid up the price of Gamestop and others to force the short sellers to buy shares back on significantly elevated prices, resulting in major losses for the Suits.
This “short squeeze” has played out spectacularly with some hedge funds losing billions and scrappy individuals with some serious risk tolerance making millions. “Roaring Kitty” Keith Gill is apparently sitting on $46 Million from a $53,000 bet on Gamestop he made in 2019.
It would not surprise me if some institutional money is at play behind the scenes, too. You know the big players are paying attention, and I wouldn’t be at all surprised if they’re helping this movement along with investments of their own.
The incredible price movements have gotten the attention of the SEC, Congress, and anyone who pays even a little bit of attention to financial markets. Amazon has discounted The Big Short for your viewing pleasure.
It will be fascinating to see how this ends. Who will wearing swim trunks when the tide goes out? Who will be scrambling for chairs when the music stops? Who will write the best-selling book and who will play the lead roles in the Hollywood adaptation?
Interestingly, as an owner of VTSAX, I’ve owned Gamestop for years and I still do. The same is true of the other small-cap meme stocks, many of which I also own in my small cap index funds in my Roth IRA and 401(k).
Looking at the performance of the index funds last week, with losses in the 3% to 4% range, you see how the meteoric liftofs of these small cap stocks (Gamestop is now a mid-cap, I guess) are drops in the ocean for the overall market.
For those heavily invested in the meme stocks, I’m sure it’s one wild ride. For me, it’s mesmerizing to watch, but something north of 99.9% of my money is on the sidelines in this match.
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Have an outstanding week!
-Physician on FIRE