According to an article I just read, we “turn off” our emotions when dealing with numbers.  Yet it also concluded that if we are aware of that, we can minimize the “turning off.”  So here we go. I am about to share with you some financial advice backed up by numbers. No one has to become emotional about this.

For many years I have refused to have anything to do with selecting investments in the stock market.  Even though I have always fancied myself as an investment genius, my record in the stock market has been reliably dismal.  Not just mediocre.  I’ll put it in caps.

DISMAL.

And it’s because of the losses.

For example, suppose I invest $20,000 in each of five stocks.  The first four go up 15% and I sell at a profit of $3,000 each – for a total profit of $12,000.

Gosh darn it!  Four successful investments with a 15%, or $12,000 profit.  I would be happy with that every time.

Unfortunately, the final $20,000 investment drops in value by 80% and I finally sell at a $16,000 loss (after watching the inexorable decline in my investment, something I do not enjoy).

That one loss not only wiped out all of my profit from the sale of the other stocks, it also left me a total of $4,000 behind.

The obvious goal for all of us when investing?  Avoid losses. So for me, the lesson learned is simple. Avoid the stock market.

I will continue to follow the advice of the 20^th century actor and humorist Will Rogers.  His simple stock market recipe:

Buy a stock.

When it goes up, sell.

If it doesn’t go up, don’t buy it in the first place.

Thanks, Will.  By paying attention to you I haven’t lost a dime in the stock market for many years.

Alan

In the current invasion of Ukraine, Russia has threatened to employ tactical nuclear weapons. The risk that Russia might launch nuclear missiles toward Ukraine, or one of its allies, reminds me of a time during the Cold War. In the Cuban Missile Crisis of 1963, the United States learned from satellite photos that the Soviet Union was building nuclear missile launch sites in Cuba.

Our President, John F. Kennedy, promptly dispatched navy ships to form a blockade around Cuba and prevent the Soviet ships from transporting their missiles.  This resulted in a very tense ten-day stand-off between the US and Russia. No one knew how it would end, but nuclear war seemed like a strong possibility.  My wife Jo Anne and I were 23 years old, and we, like many Americans, were scared.

We were so sacred that we packed our suitcases, left our one-bedroom apartment near Santa Monica, and drove North for greater safety. We had no destination in mind.

When COVID first appeared in 2020 I felt a similar need to escape.  Of course, with COVID, there was nowhere to go but to shelter at home.  Perhaps that was also true in 1963, but I always feel better when I’m taking action and not just worrying.

Jo Anne and I drove around aimlessly for a few hours, ending up in Oxnard, California, about forty miles from where we started.  We spent the night at the same motel we had stayed in on our wedding night two years before.

The following day the Soviet Union blinked and turned their ships around.  Crisis averted.  Everyone returned home.

We did not know at the time that JFK had secretly agreed to a deal – in exchange for the removal of the missiles from Cuba, he would remove U.S. missiles threatening the Soviet Union from launch pads in Turkey.

But what I discovered after returning to our apartment in 1963 was even more scary.

The motel we had chosen to hide in for safety was located a few blocks from the Oxnard Air Force base that would have been a prime target for Soviet nuclear missiles, if any had actually been launched.

From this experience I learned that sometimes the best response to a threatening situation is not to react but to do nothing.

The trick, of course, is to know, without the benefit of hindsight, which alternative to choose.

Alan

Today I’ve been thinking about turning points in my life – those events that sent my life in an entirely unexpected direction.

Most of those turning points have been the consequence of a totally unrelated decision, nonetheless a decision that would serendipitously change the entire course of my future.

One significant turning point was the day in high school when I walked into Room 357 and met speech and debate coach L. Day Hanks.  Mr. Hanks encouraged me to join the debate team, and thereby set off a chain of events that had a significant long-term impact on my life. This included meeting my first wife, who also was also a member of the high school National Forensic League.

My most vivid memory in debate was competing against Lawrence Tribe, who I now see on TV as an expert on Constitutional Law.

We debaters were an egotistical bunch, and always thought we had won every debate – even when we hadn’t.  But Tribe was in a class by himself – the best debater I ever encountered. I admired him even as he was skillfully skewering my partner and me.  We were debating health care policy and Tribe’s partner had quoted Governor Rockefeller of New York.  My partner replied that Rockefeller was not a medical authority.  I still remember Tribe’s winning response. “We did not cite Governor Rockefeller as a medical authority, but rather as (pause for effect) a financial expert.” His perfect timing and delivery caused the audience to laugh.

Another turning point was when, at age 27, I volunteered to judge at the California High School Oratory Championships.  Glen, the winning speaker, was outstanding, and I helped to pay for his trip to the National Championships.  After he returned, Glen introduced me to Jim, who has remained a good friend for more than fifty years.  Jim and I still work closely together every day on real estate acquisitions and dispositions.

Indirectly, through Jim, I met my present wife Daveen.  She and I have been together for more than forty years.

These early synchronistic turning points have continued to make a long-term difference.

In 1967 I opened my first law office and applied for space in Century City.  I was rejected because I had submitted a hastily scribbled personal financial statement.  I applied again, this time with a typed statement, but before I was accepted, I leased office space in the San Fernando Valley – where I still live and work.

I conclude that we all simply have to accept the randomness of life, for better or for worse. My goal is to make the best of whatever situation I find myself in, and to appreciate all the exciting and often unexpected consequences that flow from each of the chance encounters and choices, both large and small, that have generated the turning points of my life.

As they say, “Man proposes, God disposes.”

Alan