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The Sunday Drive - 12/03/2023 [#87]

👋🏼 Hello friends,

Greetings from Saratoga Springs, NY! Let's take it easy and enjoy a leisurely Sunday Drive around the internet. 


🎶 Vibin'

Usually there’s a theme related to the Vibe of the Week, but not always.

Journey has always been one of my favorite bands and this has always been one of my favorite Journey songs. The shared vocals between Greg Rolie and Steve Perry highlights the value of teamwork and how one plus one can sometimes equal much more than two.

This week, I’m vibin’ to Just the Same Way from Journey’s 1979 album, Evolution. Enjoy.


💭  Quote of the Week‌

“No one ever made a difference by being like everyone else.” – P.T. Barnum

”You can do anything you want, but not everything.” – David Allen


📈  Charts of the Week


I found these two charts pretty interesting. They depict “typical” bull and bear market cycles and the psychologies that drive them.

In the modern era, I believe that financial markets are largely driven by liquidity cycles. The 2020-2023 cycle might be considered a liquidity cycle on steroids as never before seen amounts of liquidity, both monetary and fiscal, were injected into the financial system in 2020 and 2021 in response to the COVID pandemic. That began to reverse in 2022 and continues today with never before seen amounts of liquidity withdrawal via the Federal Reserve Banks rapid pace of interest rate increases.

So where are we in the bull/bear cycle now?

I believe that we are at or near the end of the tightening cycle and nearing the start of a new liquidity cycle as the economy weakens and the Fed gains an all clear signal on inflation. So markets could be strong in the near to intermediate term.

As 2024 progresses, I am very mindful of the risks to the markets of the significant tax increases that will occur with the sunset of the Tax Cut and Jobs Act at the end of 2025, another way of withdrawing liquidity from the financial system. Depending on the outcome of the election in November, what the priorities of the next administration are, and whether or not we have a reasonably functioning Congress, the markets could starting discounting the impact on those tax increases sometime in late 2024 or early 2025 and be quite weak.

For now, I remain constructive on financial markets, particularly the laggards such as small cap U.S. equities.


🚙 Interesting Drive-By's

This week we have articles on taxes, population growth, investing, consumers, AI, and the law:

👀 Watch the Sunset - from Rethinking65

Though the topic is starting to show up more in financial industry publications, mainstream financial media is still mostly (and strangely) silent about the looming expiration of many tax-cuts that could significantly impact many wealthier Americans. Provisions of the 2017 Tax Cuts and Jobs Act (TCJA) are scheduled to sunset at the end of 2025 unless Congress and the president act to extend or amend them. [link]

🤔 Debunking the Overpopulation Myth - from Peter Diamondis

“It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that ain’t so.”

That wonderful quote from the 19th-century American sage Josh Billings perfectly captures what I call “Category 3 Problems.”

These are perceived, but false problems. Problems that are either based on false data, outdated trends, cognitive biases, or a scarcity mindset. Most importantly (and perniciously), they prevent us from recognizing all the progress we’ve made and blind us to the opportunities in front of us for innovation and creating a world of abundance.

Over the next two blogs, we’ll look at a few examples of these perceived but false problems. Today, we’ll begin with one of the most insidious falsehoods that has permeated society for the past 50 years: the fear of overpopulation. [link]

📈 The Full Reset - from Morgan Housel

The secret to investing is enduring uncomfortable situations, so selling at the first hint of imperfection is usually regretted. But its opposite – an unshakeable anchor to past decisions – is perhaps worse. The saying, “Our favorite holding period is forever,” should be replaced with, “Our favorite holding period is until the facts change.”

How many of us, if given a blank slate, would create an identical portfolio to the one we have now? Some would. Many of us would do something utterly different. But we don’t, because we’re burdened by past decisions and, like the military with an aging fleet, are unsure if updating our equipment is worth the high cost. In this case, the cost of updating your portfolio is the emotional sting of admitting you were wrong on some positions, and releasing all hope that you’ll eventually be proven right. [link]

💰 Older Consumers: The Great 21st Century Opportunity - from Chip Conley

Older Americans hold most of the country’s wealth, but they also are the fastest-growing age demographic when it comes to their percentage of the economy’s spending, as evidenced by the graphic below. While the historical narrative has been that older people are more affected by economic turbulence (especially inflation), this story suggests that their finances are relatively healthy. They have less need to borrow, so they’re not as affected by higher interest rates and are less at risk of layoffs than other consumers. [link]

🤓 How I use ChatGPT (As a Reasonable Person) - from Evan Armstrong

If you tried ChatGPT or other AI tools and didn’t find them useful, you should try again. There are small hacks you can do to improve your output by 50%. 

They include emotional cajoling, prompt construction, and a slight shift in your thinking. In this article, I explore these tips in depth. [link]

⚖️ Case Study: Contract Law and the Simpsons - from PLEA

While most people have been to an all-you-can-eat buffet, not many have been kicked out of one for overeating. Homer Simpson was, in the season four episode “New Kid on the Block.”


After seeing a television advertisement for The Frying Dutchman, Captain McAllister’s all-you-can-eat seafood restaurant, Homer put on extra-loose pants and headed there for a gorging.

Homer began his meal by removing an entire steam tray of shrimp from the buffet. Allegedly, Homer ate all of the restaurant’s shrimp and even two plastic lobsters before Captain McAllister finally kicked him out after closing time.

Enraged, Homer sought advice from attorney Lionel Hutz. Hutz described the situation as “the most blatant case of fraudulent advertising since my suit against the film The Never-Ending Story.” [link]


👋🏼 Parting Thought


If you have any cool articles or ideas that might be interesting for future Sunday Drive-by's, please send them along or tweet 'em at me.

Please note that the content in The Sunday Drive is intended for informational purposes only, and is in no way intended to be financial, legal, tax, marital, or even cooking advice. Consult your own professionals as needed.

‌I hope you have a relaxing weekend and a great week ahead. See you next Sunday...

Your faithful financial provocateur,