Barry Ritholtz writes about unknowns in the market:
We do not know if equities are either over or under valued, because we have no idea what future earnings are going to be. The debate about valuations often turns on which group’s forecast is going to be correct: Expansion or contraction. (We shall ignore the extremeists on both ends of the scale, as they are annoying little twerps who are almost never correct).
Consider how earnings might change in the near future: If the economy were to accelerate (Sequester ends? China improves? Europe recovers?) than earnings could increase significantly, thereby making stocks “suddenly” look cheap. The opposite of this is a US recession, where earnings fall 20-30%, making stocks appear pricey and due for a more significant correction than the 10-19% blips we have plowed through the past 5 years.
Hotel occupancy is back to pre-recession levels, writes Calculated Risk:
How to be happier with your money
Carl Richards quotes Paul Graham discussing money and happiness:
“Most people would say, I’d take that problem. Give me a million dollars and I’ll figure out what to do. But it’s harder than it looks. Constraints give your life shape. Remove them and most people have no idea what to do: look at what happens to those who win lotteries or inherit money. Much as everyone thinks they want financial security, the happiest people are not those who have it, but those who like what they do. So a plan that promises freedom at the expense of knowing what to do with it may not be as good as it seems.”
The article 8 Fascinating Reads originally appeared on Fool.com and is written by Morgan Housel.
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