The Sunday Drive - 08/18/2024 Edition [#124]
The Sunday Drive - 08/18/2024 Edition [#124]
Musings and Meanderings of a Financial Provocateur
👋🏼 Hello friends,
Greetings from Saratoga Springs, NY. Let’s enjoy a leisurely Sunday Drive around the Internet.
🎶 Vibin'
This past week, I had the great pleasure of spending time with some amazing colleagues at our semi-annual gathering. Our organization is largely remote, so when we get together in real life, it’s a wonderful and productive occasion. I am exceedingly fortunate to be a part of this outstanding team.
While we were together, I was reminded of a song from the 1983 film, The Outsiders which was directed by Francis Ford Coppola. It featured an amazing ensemble cast which included Matt Dillon, Ralph Macchio, C. Thomas Howell, Tom Cruise, Emilio Estevez, Rob Lowe, and Patrick Swayze (RIP). When a talented team comes together and forms a strong bond, incredible work can be done. That’s how I feel about my colleagues.
So this week, I’m vibin’ to Stevie Wonder’s Stay Gold from the movie’s soundtrack. Enjoy.
💭 Quote of the Week
“You can become two things as you get older: An elder, or elderly.“
— Brent Beshore
📈 Chart of the Week
It’s Alabama weekend at the Saratoga Race Course, the second biggest race week of the 7 week regular track season. Next week’s Travers is the biggest race of the season.
I was recently having a conversation with some friends about horse racing and the associated gambling that is an integral part of the Sport of Kings. One of them asked me if I like to bet on the horses.
My answer (with tongue firmly in cheek) was, “Oh no, I don’t need to. I get paid to gamble with other people’s money for a living.” A joke of course. The point however is that I am a professional investment manager and have been for over 35 years, and I take my job very seriously.
Many people conflate investing with gambling. To the uninitiated or casual investor, it’s easy to see why.
This week’s Chart shows that in the short run it is difficult to distinguish between the range of outcomes from investing or gambling. Returns can be positive or negative for either so investing feels a little like gambling.
However, given the passage of enough time, investing and staying invested will almost certainly yield positive returns.
On the other hand, if one gambles long enough, the outcome is virtually guaranteed to be negative.
Betting on the horses can be fun, and it’s certainly a social and entertaining experience. But I would offer a reminder that it’s best to gamble with entertainment dollars and not with dollars that should be reserved for investing. #PSA 🐎🐎🐎
🚙 Interesting Drive-By's
🤓 Mental Models - Merton/Real Options Framework for Debt and Equity - from Michael Kao [Link] Note: My first job in the investment management business was at a boutique firm that used the Black-Scholes Option Pricing Model to value stocks for their portfolios. If you’d like to indulge your inner math geek, this article is for you. 😊
🏀 “People and Process Make this Whole Thing Happen” - excerpt from an Interview with Keith Dawkins, President of the Harlem Globetrotters [Link]
🤔 Can an AI Health Coach Fight Chronic Disease? - from Ben Krauss [Link]
💡 Solar Energy Breakthrough Could Reduce the Need for Solar Farms - from the University of Oxford [Link]
💰 Ben Franklin: America’s Richest Printer - from Frederik Gieschen [Link]
👋🏼 Parting Thought
If you have any cool articles or ideas that might be interesting for future Sunday Drive-by's, please send them along or tweet 'em (X ‘em?) at me.
Please note that the content in The Sunday Drive is intended for informational purposes only, and is in no way intended to be financial, legal, tax, marital, or even cooking advice. Consult your own professionals as needed. The views expressed in The Sunday Drive are mine alone, and are not necessarily the views of Investment Research Partners or Cache Financials.
I hope you have a relaxing weekend and a great week ahead. See you next Sunday...
Your faithful financial provocateur,
-Mike
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