Category: Uncategorized

March 13, 2025March 13, 2025

Updating My Asset Allocation Model for 2025

For the past month I’ve been working on a few improvements to the asset allocation model that underpins my portfolio management process at Luther Wealth. I’m really proud of the models currently in place, but I like these new ones even better! I’ve been able to fix some blind spots, and I’ve also been able to avoid some structural problems with one of the equity index funds I have been using. None of these changes are mind-blowing, but I’m proud to work constantly to make small, incremental improvements to my portfolio management process.

March 11, 2025March 11, 2025

Avoiding Double Taxation in Your Traditional IRA

For many investors, traditional IRAs are a cornerstone of their retirement strategy, offering the promise of tax-deferred growth and, in some cases, immediate tax benefits. But there’s a quirk in traditional IRA rules that can trip up even the most diligent savers: the treatment of non-deductible contributions.

Failing to track non-deductible contributions to a traditional IRA can set you up for a nasty surprise—double taxation on your distributions in retirement. The good news is that you can easily avoid this problem by keeping good records from the beginning.

October 15, 2023July 20, 2024

The Flip-side of Efficient Markets: It’s Hard to be Bad

There is a lot of debate in finance about the Efficient Market Hypothesis, and to what extent it applies to real markets. I’m generally an efficient markets proponent, but that’s not what this article is about. What I’d like to discuss is a lesser known side-effect of the Efficient Market Hypothesis that no one really talks about.

December 1, 2021

What is Bitcoin?

Bitcoin is a monetary system. The best way to understand it is in comparison to two other monetary technologies: the gold standard and the U.S. Federal Reserve. In both of these systems, you need a way to control how much money exists (supply), and how people give it to each other (exchange). Bitcoin is simply one more way to implement supply and exchange of currency.

Bitcoin is also a thing that random d-bags talk about to each other, and to their bored dates. We will not discuss that aspect of bitcoin here but it’s actually the predominant societal aspect of bitcoin.

This article was originally posted on December 14, 2015 and updated on December 1, 2021.

Continue reading “What is Bitcoin?”

November 4, 2021

Should I Buy A New Car?

For several years, I’ve been thinking about buying a car. This is a big deal for me, because I have owned exactly one vehicle in my life, a 2004 Ford Ranger. He’s my buddy. I feel bad about looking for a new one, but it’s time (or so I thought). One consequence of my vehicle loyalty is that I haven’t given any thought to buying a car since long before I was interested in financial planning.

It’s pretty confusing! So I want to share my thought process here to illustrate 1) a way to think about buying cars, and 2) how the economics of car ownership can be an example of how we can use a financial modeling approach to simplify other complicated decisions.

December 5, 2019

Reading List – 5 December 2019

Great example of status quo bias in an article about the flu this week. And EU privacy laws are helping a murderer wipe his history from Google. Fun stuff!

The “Right to be Forgotten” doubles back and shoots the shark. Volokh Conspiracy. Wow! So now EU privacy laws are responsible for something even worse than cookie popups everywhere.
Why doesn’t the flu freak us out more? Futurity. File this one under “Cognitive Biases: Status Quo Bias”. Same reason why people aren’t deathly afraid of riding in cars.
Trump Didn’t Shrink U.S. Military Commitments Abroad—He Expanded Them. Foreign Affairs. In my private life I’ve frequently tempered my criticism of President Trump by saying something along the lines of, “But I like that he’s bringing troops home.” I guess that’s just a myth?
Big Calculator: How Texas Instruments Monopolized Math Class. Medium. Isn’t this supposed to be impossible in a market economy? What prevents competition here?
How Not To Die. Paul Graham. Personally inspirational.

CC BY-SA 3.0, https://commons.wikimedia.org/w/index.php?curid=511527

November 14, 2019

Reading List – 14 November 2019

The most important financial news of the past two weeks is that scientists have discovered that Jackson Pollock’s technique cleverly avoided a characteristic of fluid dynamics that leads to unwanted curly tails on paint pourings. Finance!

Source: Plos One. Pollock avoided hydrodynamic instabilities to paint with his dripping technique.
Bernardo Palacios, Alfonso Rosario, Monica M. Wilhelmus, Sandra Zetina, Roberto Zenit.

Pollock paintings avoid a curly physics problem. futurity.com.
You silly, silly people. Tyler Cowen. Politics… don’t matter.
The Myth of the Nazi War Machine. Notes on Liberty.
Lindsey Graham keeps moving the goalposts to downplay Trump’s Ukraine dealings. Vox. I think a lot of the drama that has unfolded with the Trump administration was fairly predictable in 2016, but one thing that has surprised me is the absolute downfall of Sen. Lindsey Graham as a serious person.
Stab a Book, the Book Won’t Die. Craigmod.
Immediate brain plasticity after one hour of brain–computer interface. Journal of Physiology. Brains are so, so cool.
It’s Time to Take Down the Mona Lisa. NY Times.
How to Steal a Billion. Oversharing. In the future, it will be good to think back and remember the WeWork saga whenever a financial guy in a suit is trying to tell you he has a special understanding of the marketplace.

October 7, 2019

What Are Repo Rates and Why Are They Messed Up?

Two weeks ago, something weird happened in the lending markets that businesses and banks use to shuffle their spending money around. A sharp increase in repo rates resulted in the Federal Reserve conducting its first major intervention in short term lending markets since the 2008 credit crisis.

September 25, 2019

Wednesday Reading List – 25 September 2019

An extra long list this week to catch up after Hurricane Dorian. Favorite quote this week: “Thus, accumulating evidence shows that over-representation of males in STEM fields is perhaps better framed as under-representation of males in reading fields and the latter is driven by relatively low reading achievement among males.”

Circumstances in Which I Will Not Pet Your Dog. New Yorker. Yep, pretty much.
Girls’ comparative advantage in reading can largely explain the gender gap in math-related fields. Marginal Revolution. Evidence that the gender gap in math/science is primarily caused by boys being terrible at reading in school.
Active Learning Works But Students Don’t Like It. Marginal Revolution, again.
The American Working Man Still Isn’t Working. Foreign Affairs. I was quite shocked by the fact that 13.7% of men age 25-54 are not working, up from 12.8% in 2007.
Greta Thunberg Is the Anti-Trump. New Yorker. When I was sixteen I mostly played Mortal Kombat Trilogy all day after school. Inspiring!
A crack just emerged in the financial markets: The NY Fed spends $53 billion to rescue the overnight lending market. CNN Business. Odd.
A Lunar Space Elevator Is Actually Feasible & Inexpensive, Scientists Find. Observer. Science is so cool.
Physicists Finally Nail the Proton’s Size, and Hope Dies. Quanta Magazine. Even when science is kind of boring, it’s still so cool.
The boring technology behind a one-person internet company. Wenbin Fang, ListenNotes. Not investment-related at all, but I loved this article and found it encouraging as a fellow one-person internet company.

August 14, 2019

Wednesday Reading List – 14 August 2019

I really enjoyed the article about Google’s internal culture, but the key article this week is a short blog from PIMCO on the possibility of negative interest rates in the U.S.

How Government Prolonged the Lobotomy. AIER. Super creepy.
What is Amazon? Zack Canter. HT Tyler Cowen.
Study: many of the “oldest” people in the world may not be as old as we think. Vox. I feel like this type of thing is going to pop up more and more as people do Big Data things.
Three Years of Misery Inside Google, the Happiest Company in Tech. Wired.
How One City Saved $5 Million by Routing School Buses with an Algorithm. Route Fifty.
GitHub Stars Won’t Pay Your Rent. Medium.
Interest Rates: Naturally Negative? PIMCO. The world is not prepared for a negative dollar interest rate.