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Bamboozled!

Looking back on it, I can't even tell you how it happened.  I mean, I am a student of behavioral finance. I know about confirmation bias, recency bias, anchoring, etc., etc.  And yet, I fell for one of the oldest scams there is.

It all started when I stopped in the local supermarket on my way to play tennis. I was on my way out when I heard over the loudspeaker that there was some event happening at the back of the store, where they would be giving away a free kitchen utensil. The sad fact is that I have an abnormal fondness for kitchen gadgets — hard to explain, really, since I'm not much of a cook — and combined with the word "free," my favorite price, the lure was irresistible. So I headed to the back of the store.

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Many Happy Returns…or Not

Written by Neal Merbaum.

I've been on a bit of a buying spree lately. No, I've not suddenly become a shopaholic. It's just the way things worked out. There was the gear I needed for an upcoming hiking trip; the printer my mother-in-law needed; another printer for my wife; a TV for the kitchen.... All reasonable, right? (OK, maybe I went a bit overboard on stuff for the trip.)

With almost all of the things I bought, I knew right away if I had made the right choice. Kitchen TV? Looks great. Printer? Good decision. Swiss Army knife with 43 tools? Not so much.

If only it were that easy to determine if our investment decisions were the right ones.

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Yes, It Could Happen to You

Written by Neal Merbaum.

"Hi, is this Mr. James?"
"Yes. Who's this?"
"This is Colonel Gold with the US Consulate in Uruguay. I'm sorry to have to inform you that your grandson has been arrested and is in jail."
"Oh my God! Paul is in jail?"
"Yes, Paul has been arrested and is sitting in jail right now. In order to get him out, you will need to send $2,500."
"I can't believe this. What do I do now?"
"Call the number I will give you and you will receive instructions on how to send the money."
"OK, thank you for letting me know."

This sounds like a story, but except for the names, which I've changed, this is an actual conversation that took place between my father-in-law and a scam artist a couple of years ago.

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The People’s Car

Written by Neal Merbaum.

In 2014, Volkswagen sold more cars worldwide than any other car company besides Toyota. In the category of light passenger vehicles, it was number one. One of the attractions was its diesel cars, which, the company promised, would give you both great performance and excellent full economy.

There was just one problem. It wasn't true. 

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The Little Blue Pill

Written by Neal Merbaum.

"It's just for recovery!"

Fans of Larry David will recognize those immortal words from an episode of the HBO show Curb Your Enthusiasm. For the rest of you, Larry was referring to a well-known little blue pill he had been caught taking that — he claimed — didn't help him with performance, just with recovery.

When the markets go down and the value of our portfolio suffers, wouldn't it be nice if there were a little blue pill the markets could take for performance and recovery? Unfortunately, there isn't. But in lieu of that, I'm going to suggest a way of looking at performance that I hope will at least mitigate any "performance anxiety."