Reader Mail January 26, 2000January 28, 2017 Rick Boyd: “Regarding your column [on the dangers of shorting what you think is an overpriced stock], I believe J.P. Morgan said, ‘The market can remain irrational longer than you can remain solvent.’ I might be wrong about that, but it does serve to remind us that market timing makes sense only if we can predict the movements of the herd.” Did J.P. Morgan really say that about my column? Awesome! Seriously: It’s a great quote. Thanks. Does anyone know for sure whether ol’ J.P. said it, or who did? Gavin Graham: “You’re quite correct that Quickbrowse is a wonderful service, but you should tell users of Lotus Notes (like me), that it’s still having problems delivering your column in a readable (to them) form. Quickbrowse tells me that they’re working on it, but in the meantime, let Lotus users know, or they may become dissatisfied with the otherwise excellent service. “PS [Gavin continues] I’ve been enjoying Barton Biggs‘s columns for over 15 years, and the quality of his writing is reason enough to read them. As for accuracy of forecasts [which has been touched upon in recent columns], those of us who were in Hong Kong at the time still remember his ‘maximum bullish’ call on China in September 1993, and, although he changed his mind a couple of months later after a big move up in the Hang Seng Index, still treasure such insights as that China is a really big country, with lots of consumers discovering capitalism and therefore you should buy a bunch of Hong Kong power and trading companies.” Bob Iserman: “You recommend putting one’s investment dollars into ‘two or three no-load, low-expense, low-tax index funds,’ and that for me raises some questions. What is a low-tax index fund? More importantly, which index funds have been the most rewarding both in up and down markets? I am concerned about the future with indexed investments when the market declines, which it inevitably will.” All index funds tend to have light tax consequences because they do little trading. They mainly buy and hold. Where there is little trading, there are few realized taxable gains. Of course, if you hold your fund within the shelter of a retirement plan, this isn’t an issue. As to how index funds will do in a bear market — they will do badly. But no worse, likely, than most other funds. Indeed, they will do “less worse,” because at least they will not be adding large expense charges to their dismal results. As between the various indices, one might ordinarily expect small-cap funds to do worst in a bad market, because small-cap stocks are typically more volatile than blue chips. And that may be the case the next time we have a bad market. It’s also possible, however, that the S&P 500 Index will dive deeper than broader indices, because it has climbed so much higher. I don’t know. LIVE FREE OR DIE Allen Lewis: “I saw that column title and thought your article would be about New Hampshire but it turned out to be about a bank in Maine. Did you get your state mottos confused?” Thanks, Allen. The Maine reference was to a fanciful Canadian military invasion. But if you like, I could have Canada invade NH next. Dean Reinemann: “Speaking of ‘Live or Die’ take a look at www.deathclock.com.” Thanks, Dean. It’s pretty terrible. They just assume you will live 73 years no matter when you were born (if male). I told it I was born in 1920; it told me I would die . . . seven years ago. I know a lot of people born in 1920 who would dispute that vigorously. The truth is that today’s kids will likely live a lot longer, on average. And according to the trusty Life Expectancy module in Managing Your Money (no longer for sale), today’s 72-year-old males, if married nonsmokers, are likely to live 19 more years, to 91. Single smokers in good health: about 12 more years. Tomorrow: Column #1000 (This One Was #999)