Chickity check yo self before you wreck yo self
Good morning, Bacon Bakers! One of these days, we’ll find a name that sticks.
That said, how do you make your bacon? In a skillet? The oven? Please, don’t say the microwave.
*shudders*
If you’re willing to be patient, I think the oven is best. It’s also the cleanest — no bacon grease splatter to clean up.
What’s on the menu?
A quick note
Bacon fact #3
Number of the day: 3,389
Lesson of the day: Overcoming overconfidence
Savory selections
A quick note
If you’re observant, you might have noticed I tweaked the timing of this week’s Bits delivery. It dawned on me, how can I have a bacon-themed newsletter that can’t even be enjoyed during breakfast? So, instead of Thursday afternoon, we’re switching to Friday morning.
Now, you can enjoy this bacon with a glass of OJ and some scrambled eggs.
Bacon fact #3
Speaking of bacon...
Why not make this a staple? At least until we run out of bacon-related facts.
Did you know that the average American eats nearly 18 pounds of bacon every year?
That’s like eating a bowling ball of bacon. Actually, it’s more. Bowling bowls weigh anywhere from 6 to 16 pounds. So, it’s like eating a mid-weight bowling ball — and then topping it off with a small bowling ball.
That’s…greasy…
Number of the day: 3,389
As in, the S&P 500 closed at 3,389 on Wednesday, setting a record high. So much for that bear market, eh?
Except the record comes at a perplexing time. Unless you’ve literally been living under a rock this year — and I wouldn’t blame you if that were the case — you know it hasn’t exactly felt like a record-breaking year.
Maybe the record for most bizarre and chaotic.
The S&P’s new high casts a bright light on the stark contrast between the stock market and the economy. But they’re allowed to be different. The economy looks at current indicators. The stock market is forward-looking. The present and future can, and often do, look different.
My concern is the mere fact that the future is unpredictable. And that the market is chock-full of emotional investors right now — especially after the spring surge of new brokerage accounts. Remember that massive inflow of new investors?
Emotions swing when new stimuli or information presents itself. You’re human, you know what I mean. We make rash decisions when we’re emotional.
When the subject is our wealth and life’s work, we’re not suddenly cool, calm, and collected. Quite the opposite. We panic like there’s an unclassified species of spider on the back of our neck.
What happens if optimism fades? A volatile event could jolt people awake. We’ve already seen what happens in that situation earlier this year.
Maybe FAANG stocks can keep the broader market afloat, maybe not.
Time will tell.
That’s why it’s important to not be overconfident...
Lesson of the day: Overcoming overconfidence
It’s safe to say confidence, in general, is a good thing. It’s an admirable trait that usually pays dividends in real-world applications. Nailing an interview. Asking an attractive girl or guy out on a date. Skydiving.
These activities require confidence.
But the investing world is a little different. No individual person or company controls the stock market. As important as understanding and forecasting market movements is, it’s impossible to make perfect market predictions, which can cause investors to be less cautious.
Overconfidence leads to an illusion of control, which leads to poor investment decisions.
The best way to overcome overconfidence is to practice self-awareness. Make it a habit to consider the consequences of investment decisions. Ensure that your decisions align with your long-term investment plan. Ask professionals for their opinion. You can even poll Reddit users on relevant subreddits.
Oddly enough, it’s a pretty good place for unbiased advice.
Considering the stock market effectively divorced the economy and is doing its own thing, it’s not a bad time to check yourself. A little self-reflection from an investing standpoint could help keep you centered.
Savory selections
Just one gem for you today, but it’s long enough to fill your morning reading time.
Finding Success In Failure: Lessons From Ray Dalio — Personally, I’m a fan of Ray Dalio. I always appreciate unique perspectives. Here’s a 2018 Forbes piece on Dalio, his growth, and the development of his firm, Bridgewater Associates.
If you’re enjoying this newsletter, please share it! It’s a win-win. You’ll look financially savvy and sophisticated, while we get to grow the community.
As a reminder, you can check out previous editions of the Bits newsletter here.
Stay sizzlin’,
Carter Kilmann