A Case of Cognitive Dire Straits

By Jim Woods

After watching the recent debate between President Biden and former President Trump, I was left truly dumbfounded. First, Donald Trump managed to be relatively calm and collected, traits not usually associated with the former president. Yet for Mr. Biden, well, I found myself astonished by the man’s obvious mental meltdown.

Anyone who viewed that debate with even a scintilla of objectivity was compelled by reality to conclude that President Biden lacks the mental acuity and corresponding verbal facility to be the leader of the free world. Indeed, the Biden debate performance was more like witnessing a failed neurological exam than it was an exposition of policy positions.

Now, I do not make this observation with any pleasure. And while I am not a supporter of the president, it actually pained me to see a man clearly in cognitive dire straits. Because, at the very low-bar minimum, you would think that having intact cognition is a requirement of what can easily be argued is the most important job in the world.

Sadly, this case of cognitive dire straits is one of Father Time’s cruelest jokes. Physical decline (and particularly cognitive decline) will befall us all, if we’re lucky enough to live that long. Yet, be that as it may, it is painfully obvious that President Biden is not up to the job the American people elected him to do nearly four years ago.

At one point, however, Joe Biden was a different man. I know this, because in August 2008, I spent some five hours sitting next to the man on a flight from Washington, D.C. to Los Angeles. He was then Senator Biden, and even back then, he did display a few signs of, shall we say, unusual behavior. And while that behavior didn’t resemble anything near the kind of cognitive decline America witnessed at the debate, it was, I think, quite revealing as to his approach to life.

Given the recent headlines regarding the president, I thought I would republish my reflections on this 2008 plane ride, so that you can read about what I witnessed on that memorable flight.

So, please enjoy my reflections in the following 2008 article, titled:

‘We All Scream for Ice Scream: A Joe Biden Tale’

You can tell a lot about a man by the way he eats.

Some men like to sit down to a meal, take their time and savor each and every morsel of food and drink. People like this tend to be thoughtful, meticulous, confident and in many cases, hedonistic. How do I know this? Well, I’ve been known to spend more time than most getting through a multi-course, wine-paired meal.

Still, other men like to dig right into their prize, attacking the meal with fervor and a literal hunger for life that reveals their carpe-diem approach to the world. This type of person tends to be decisive, purposeful, driven and a born leader. My favorite example of this type of eater is my good friend and fellow investment guru Doug Fabian.

But what do you say about a man who eats his meal in reverse order?

That thought has plagued me ever since I sat next to Sen. Joe Biden on a flight from Washington, D.C. to my hometown of Los Angeles, California. Sen. Biden was on his way to L.A. for an appearance on HBO’s “Real Time with Bill Maher,” while I was returning home from my annual pilgrimage to the nation’s capital for a meeting with friends, publishers and people from some of my favorite think tanks.

After exchanging pleasantries with the senior senator from Delaware, Biden wasted no time in digging right into his criticisms of the war in Iraq, and what he perceived to be the folly of the Bush administration. I expected nothing less from the senator, as he’s known for his outspoken critiques and his shoot-from-the-hip commentary.

What I didn’t expect was a lesson in how to eat a meal backwards.

Now, since I had the benefit of first-class seating accommodation during this journey, the flight attendants were very conscientious when it came to serving what was a surprisingly tasty meal. The first course was a salad with Italian dressing, which was followed by a main course of a plump, well-seasoned chicken breast and a side of rice. The best part of the meal for me was the dessert, which was a generous scoop of gourmet chocolate ice cream.

I ate my meal with my usual casualness, and in the aforementioned order. Sen. Biden, however, took a different path. Biden accepted the salad, but he put it aside and saved it for later. When the main course came, he politely rejected it. But when the ice cream came, Biden’s fervent personality really came out. He emphatically asked for a serving, although he had not yet eaten any food.

Biden ate his ice cream while we discussed Kevin Phillips’ book “American Theocracy,” the then-latest critique of the Bush administration’s religious overtones. After eating the ice cream, Biden pulled out a hefty ham sandwich from his briefcase and consumed it in a deliberate and determined fashion. Once the sandwich disappeared, the senator turned to the only remaining bit of food left on his tray table, the salad.

As I watched this reverse-order meal consumption, a thought occurred to me: Is this why the federal government is so screwed up? Is Sen. Biden’s backwards approach to a meal indicative of what’s wrong with Washington? Does this backwards eating pattern explain why the government does everything less efficiently and less effectively than the private sector?

Given my theories on discerning knowledge of a person based on how they eat, what was I to make of Sen. Biden’s meal habits? The only logical conclusion is that Biden looks at the world — shall we say — differently from the rest of us. And while there is nothing wrong with a little different perspective on things, I don’t think I want someone a heartbeat away from the presidency who eats his ice cream first.

The next thing you know is that person will advocate raising taxes to stimulate the economy, negotiating with our ideological enemies as a means of portraying strength and railing against judges who think interpreting the Constitution is the only proper function of the courts.

Wait a second… that’s what Biden wants?

I knew there was a reason why he ate the ice cream first.

ETF Talk: In Long-Term Bonds We Trust… Especially with This ETF

Religion, politics and money are three rather gauche topics for mixed company.

However, as you all know by now, I am not one to shy away from heady topics or a bit of friendly fire to keep things lively. I say this, because I will briefly touch on all three of these topics, starting with a bit of a religion-related history fact.

In 1955, President Dwight D. Eisenhower mandated that the phrase “In God We Trust” be printed on all U.S. currency. Dating back to the Civil War, that phrase was used to convey to the world what America stood for, especially during a time of war, with the religious fortitude of its concerned citizens.

While this may no longer be the common sentiment, it is still part of our history — as is politics. Thankfully, this discussion is not centered on politics themselves, but more the Fed, its impending rate cuts and the likely re-emergence of the “don’t fight the fed” rallying cry amongst financial professionals. So, as religion and politics fluctuate, money does as well.

In a monetary sense, investors are looking for a way to protect their portfolios from the risk of stagnation in stocks and commodities — while also locking in gains. Now that we’ve touched on the three “untouchables,” lets get to the heart of the matter — long-term bonds and one fund in particular: iShares Core 10+ Year USD Bond ETF (ILTB).

Unlike stocks, bonds are a loan to a company or government, and as such they are likely to be less volatile, which is something many investors are craving right now — with both inflation and Fed action up in the air.

ILTB, in particular, covers a broad spectrum of long-dated USD-denominated bonds with at least 10 years remaining in maturity. The fund includes U.S. Treasurys, government-related bonds (U.S. and non-U.S.), investment-grade and high-yield corporate bonds and emerging-market bonds. The fund allocates roughly the same amount of stake to both corporate and government bonds. Geographically, this fund does not discriminate and offers exposure to U.S., developed-market and emerging-market issuers.

The fund has $604.21 million in net assets, $603.91 million in assets under management and an incredibly reasonable expense ratio of 0.06%. To further whet interested-investor appetite, ILTB offers a dividend yield of 4.72% and paid $2.37 per share in the past year. Its dividend is paid every month, and its last ex-dividend date was July 1, 2024.

As shown in the chart above, ILTB has seen some incredible movement since November of 2023. Though it hit a bit of a downturn in late April, it immediately picked itself up. Since its last trading day, Monday, July 8, the fund’s price gained 0.159% and rose from $50.22 to $50.30 — giving it four days of continued gains.

Tuesday’s price action fluctuated down slightly, but the fund has the volume and liquidity to continue gaining in the days and weeks to come. According to stockinvest.us, the ETF is expected to rise 3.86% during the next three months and, with a 90% probability, hold a price between $50.91 and $53.33 at the end of this three-month period.

The fund’s top 10 holdings include United States Treasury, 42.53%; AT&T, Inc., 0.79%; Mexico (United Mexican States) (Government), 0.74%; Comcast Corporation 0.67%; Oracle Corporation, 0.63%; UnitedHealth Group, Inc., 0.61%; Verizon Communications, Inc., 0.61%; Bank of America Corp., 0.56%; Saudi Arabia (Kingdom Of), 0.56%; and Apple, Inc., 0.56%.

In sum, it is in long-term bonds we trust. And it is in iShares Core 10+ Year USD Bond ETF (ILTB) where we potentially invest.

So, as long as sentiment around religion, politics and money fluctuate — stability can never be underestimated. And ILTB may be just the answer interested investors are looking for, with its solid liquidity, low expense ratio and enviable dividend yield.

So, in true Renaissance fashion, I started with a bit of history, and I will end with a bit of it as well. The 1809 Austrian statesman, and minister of foreign affairs, Klemens von Metternich, championed conservatism, helped in the victorious alliance against Napoleon I and restored Austria as a leading European power. So, as someone who was likely well-versed in fluctuating sentiment, this tidbit he offered up is still quite powerful: “Stability is not immobility.”

As always, I am happy to answer any of your questions about ETFs, so do not hesitate to email me. You may see your question answered in a future ETF Talk.

In case you missed it…

Born on the Fourth of July

“Jim, why do Americans always think the United States is the greatest country in the world? Don’t the French say France is the greatest country? Don’t the Russians say Russia is the greatest? Isn’t it all just an accident of birth?”

This is a question a friend posed to me recently, as she knew I was an exponent of the notion that America is the greatest country ever conceived. While her question is misguided, it is one to take seriously, as I think a lot of people have the mistaken and tribalistic idea that because you happen to be from a certain place that somehow you naturally will identify with that place/tribe as being superior.

Yet, as I explained to my friend, I don’t think America is the greatest country because I, Jim Woods, happened to be born in suburban Southern California.

The reason why America is the greatest country ever is because it was created on the philosophic principle that man is an end in himself, and not the means to another man’s end.

The Founding Fathers enshrined this concept in the Declaration of Independence and the Constitution, documents so important, and so beautiful an achievement of political and moral thinking, that it sets us apart from any other country in history.

Indeed, the corollary concept involved here is that government’s only legitimate function is the protection and preservation of individual rights. And the Founders knew that in order to preserve individual rights, they must restrict the ability of government (i.e., the group) to infringe upon those rights.

So, you might say that this idea, the sacrosanct idea that man is an end in himself, is what was truly born on the Fourth of July.

Now, think about this idea for a moment, because on this Fourth of July eve, the idea deserves to occupy a substantive place in your grey matter, right now.

You see, it is the concept of enshrining individual rights that has made all things in America possible. Think about it. Every value you hold dear implies a valuer free to choose that value, and free to achieve that value.

The fact that you can be who you want, do what you want (as long as you don’t infringe on another’s rights) and think what you want — and have that protected by the very fabric of your country’s founding principles and founding documents — is why America is the greatest country.

My favorite novelist/philosopher, Ayn Rand, wrote the following about her love for her adopted country of America, which pretty much sums up my feelings on this issue:

“I can say, not as a patriotic bromide, but with full knowledge of the necessary metaphysical, epistemological, ethical, political and esthetic roots — that the United States of America is the greatest, the noblest and, in its original founding principles, the only moral country in the history of the world.”

The only moral country.

Tomorrow, as you are eating hamburgers, hot dogs, drinking beer and looking up at the fireworks display, remember you do so courtesy of the morality of the Fourth of July.

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Be Like the Savage

“But I don’t want comfort. I want God, I want poetry, I want real danger, I want freedom, I want goodness. I want sin.”

–Aldous Huxley, “Brave New World”

This year’s FreedomFest theme is “Brave New World,” a reference to the 1932 dystopian classic by Aldous Huxley. In a pivotal scene in the novel, “John the Savage” rejects the taking of the placating drug “soma,” which keeps citizens mentally “stable” and that essentially eliminates all real pleasure and all real pain and suffering.

It is this state of humanity that John, hitherto an outsider to this Brave New World, rejects. You see, the “Savage” doesn’t want mere comfort. He wants the sublime. He wants poetry, he wants to live in a world where failure and achievement are both possible. He doesn’t want stability, he wants freedom. He wants a life of adventure — a life that is in direct contradiction to a goal of stability.

Be like the Savage.

Wisdom about money, investing and life can be found anywhere. If you have a good quote that you’d like me to share with your fellow readers, send it to me, along with any comments, questions and suggestions you have about my newsletters, seminars or anything else. Click here to ask Jim.

In the name of the best within us,

Jim Woods

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