How Markets Move

(Read time: 4 minutes)

Good morning,

If they ever make a Howard Marks movie, Tom Hanks is for sure the guy to play him (look at the quote below).

Without further ado, your Thursday newsletter.

Read This

The best articles I’ve read recently.

You can read the Financial Times article if you register (it’s free).

Why most investors ignore the mistakes of the past (Howard Marks)If you’re not careful, credit card rewards will lose you money (Financial Times)Here’s what you can afford for a house or a car (Thomas Kopelman)How to stay on the same financial page as your partner (WSJ)Money doesn’t buy happiness, but it can help you avoid being unhappy (Humble Dollar)

Not That

The type of shit you should ignore.

Why passive investing makes less sense in the current environmentWall Street loves this mega-cap Chinese tech stock

I removed the links. Use this section to train yourself on identifying headlines that suck.


“Like a pendulum, markets swing back and forth. This doesn’t mean you should try to time the market, but it’s important to remember that things won’t stay this bad, or this good, forever.”

Investors are told to “buy low and sell high,” but often do the opposite.A common error is to use past performance as an indicator of future performance.Over time, asset classes tend to move toward their averages.

See if this sounds familiar:

You hear about a stock, cryptocurrency, or sector on the news or from your friends. People are up big from their initial buy and the investment keeps climbing. You feel like an idiot for not being invested too, so you join the fun.

Then a few months later, your investment is down. You’ve lost money. How is that possible? You’re pissed and think the investment is stupid so you sell to get your money back. Now you don’t want to invest because it’s too risky.


Reader: I’m trying to save up for a wedding in about 3-5 years. How would you go about that?

Cole: Firstly, congrats on planning that far out and having found the person you want to spend your life with (or being really savvy and planning for when you do). Cheers, my friend!

Here’s how I’d determine how much to save:

How much do I plan to spend? Then, to be conservative, I might add another 5-10%.How many months (or paychecks) until the desired date?

Let’s say you want to save $35,000 in 4 years. That’s about $730/month for 48 months.

I’d set up my direct deposit to send $730/month to a separate account and I’d leave it be.

Here’s what I’d put my money into:

No Stocks – Stock returns are great, but 3-5 years isn’t a long enough time horizon for me to put my money there.High-Yield Savings – It’s no secret I’m a fan of these, especially given that interest rates are actually meaningly now. Super flexible. Just a savings account that doesn’t suck. I use Wealthfront.I-Bonds – The US Government allows you to buy savings bonds meant to protect you from inflation. You can buy $10,000 annually (the website sucks). Currently offering 6.89% APY if you purchase before April 30, 2023. Learn more.

Have a question for me? Respond to this email and I’ll include it in a future newsletter.

It’s almost Friday. Grab a DONUT.


If you avoid the news because it just brings you down, the DONUT is for you.

I’m a news junkie – constantly reading and listening to the latest stories (and spending too much time on Twitter).

When I found the DONUT, I was reminded that the news could be fun and entertaining.

It’s super quick. There’s no clickbait. Just news that’s actually enjoyable to read.

There’s a reason they have 80,000 daily readers and counting.

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“Your personal experiences make up maybe 0.00000001% of what’s happened in the world but maybe 80% of how you think the world works.”


— Barry Ritholtz (@ritholtz)
Jan 9, 2023

I love this quote from Psychology of Money.

If you grew up in the depression era, you’d likely be weary of stocks.

If you grew up in a family that didn’t talk about money, you might think “people don’t talk about money.”

Realizing this allows you to challenge certain beliefs that hold you back with money and in life.

“Is that really true?”

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PS: Check out my interview with Financial Samurai, AKA Sam Dogen.

Disclaimer: This newsletter is strictly informational. It is not investment advice, tax advice, financial advice, or a solicitation to buy/sell any assets. Please do your own research. You’re an adult and you’re responsible for your own decisions. This newsletter may contain affiliate links, meaning I get a commission if you decide to make a purchase through my links (at no cost to you).