MAMARONECK, NEW YORK – Greetings from my dad’s one-bedroom apartment…

It’s time for our Friday mailbag edition, our first one since Kate, the kids, and I landed back in America.

This week, we talk about curbing a smartphone addiction… a reader struggles with “contrary advice” about a market crash… and we discuss my latest “big steel box” investment idea.

All this and more below, so let’s dive in…

Reader comment: I missed the information about “giving up your smartphone.” I am very interested in your thoughts about why… and I congratulate you. Is it possible to “get along” in life without a smartphone? It seems we will need them for everything: shopping, banking, investing. Thanks for your very interesting and helpful Postcards.

I bought my first stocks when I was 11 years old, in 1987. Ever since then, I’ve had a compulsion for checking the latest stock market prices. First in the backpages of the Financial Times, and then, when the internet came along, at Yahoo! Finance.

My chronic “internet checking” then morphed to include emails, text messages, Facebook, and news headlines. Smartphones just made the problem ten times worse as I had a computer in my pocket.

Now, I’m conditioned to check my phone any time I feel even vaguely bored or uncomfortable.

It got to a point where I was checking my phone 100 times a day…

95% of the time, I’m not using my phone for anything urgent or important. I just cycle through the same series of six or seven apps, checking for updates or messages. It’s a form of escapism from boredom and anxiety.

One consequence of this “checking” compulsion is that I’ve wasted a lot of time hunched over a tiny screen for no reward.

Another consequence is that I’ve destroyed my cognitive patience. My mind is now like a ping pong ball. I can’t sit still anymore. I fidget. I can’t get through long books or movies. And I sleep poorly.

So, as I wrote here, I’m taking back control.

The first step is replacing my smartphone with a flip phone. The second step is limiting my use of the internet to one hour a day (which forces me to batch the tasks I use the internet for.) The third step is seeking solace in books and printed investment reports.

It’s been about two months now since I started making these efforts to win my mind back, and frankly, I haven’t made a lot of progress yet.

I’ve fallen off the wagon several times. And I’m no closer to finding a long-term solution to banking, shopping, traveling, and keeping in touch with friends and family without using a smartphone.

I’m a bit discouraged. I’m not giving up though… (I’m writing this note to you with a pencil and a pad of paper.)

Reader question: I know you can’t give advice, but my concern is what to do with “contrary advice.”

I’m trying to figure out this problem of a coming crash, and, at the same time, some very promising stocks like commodities, shipping stocks, tankers. I guess some people “sit on the sidelines” of the market, or are entirely out of the market, waiting till it offers much more value after the “crash.” Some other analysts say to prepare for the crash in the not too distant future.

It’s confusing trying to prepare for the crash, and at the same time follow the advice of value stock analysts who say that it’s better to have your money in stocks than to not. Can you help me sort this out?

This is a great question. I personally struggle with this all the time, too.

Are you a perfectionist? I am… And it’s not a helpful trait when building an investment strategy.

Because in this game, the correct strategy is not “I’m going to predict the future and then bet everything on that prediction and achieve a perfect score.”

Instead, it’s “the future will be random and unpredictable and my portfolio needs to do well overall even though some of my decisions won’t work out.”

Take the model portfolio I created for Tom’s Portfolio subscribers, for example. We expect a decline in the overall levels of prosperity in America, but we can’t be sure whether the default will be deflationary or inflationary or both.

So we’ve hedged our bets by holding gold, silver, and shipping stocks and measuring our performance not in terms of the USD but in terms of gold.

Reader question: Immensely enjoy your Postcards and investment advice to boot. Re the shipping container idea: if these boxes have ended their useful life, then who is buying them and why pay such a high price, when a new one costs a fraction?

Because there’s a shortage of these boxes.

The boxes take four months to manufacture and the three large box manufacturers in China are currently operating at 100% capacity.

If a shipper has a $1 million cargo to transport across the Pacific, he’ll pay whatever price he must to secure a container box… $2,000… $4,000… $6,000… it doesn’t matter.

Obviously, this situation won’t persist… and sooner or later… prices will normalize. But it does imply a big margin of safety for buying these box leasing businesses.

Reader question: I believe I had a policy such as you’re suggesting. Early on the interest it earned paid off it’s life insurance premiums and the cash value increased.

Unfortunately as I got into my late 70s, the increasing insurance premiums, because of ageing on the life insurance part of the policy and the lower interest rates environment, ate into the cash value of the policy. It eventually became essentially valueless. I’m now 88. Are your policies different?

The Death Benefit is the key number. That’s the payment your beneficiaries get when you die. The only way a whole life insurance policy isn’t worth anything is if you don’t die!

Cash value is just a sort of accountant’s estimate of what the policy is worth in the years leading up to death. It doesn’t mean much. In a whole life policy – like the “Income for Life” policies I often write about – the the annual premiums are fixed at the start of the policy.

Reader question: You, and many other experts warn of a potential massive crash of the stock market. And you say you are “out of the stock market” for this reason. Yet you continue to grow the number of precious metals and shipping stocks in your portfolio.

Do you feel that your stock choices will survive, or overcome a substantial decline in the stock market? Just trying to balance the FOMO [Fear of Missing Out] and having a conservative amount invested in each of your recommended trades. Please share your thoughts on how you think a substantial market crash would affect your portfolio.

I don’t expect a “massive crash” in the stock market. It could happen, of course, but I imagine it carries a small probability, and I’m certainly not predicting one.

More likely, I think we’ll see a decade or two of poor – or even negative – stock market returns, relative to inflation and especially relative to gold.

I’ve designed our portfolio to preserve wealth – and even grow a little – in an environment of inflation, deflation, and government default, leading to what we call the a “global synchronized currency devaluation.”

Reader question: Regarding your comments on student loans, I have a question. I can definitely see the current administration forgiving the current debts as a way to buy votes and swing the negativity to the positive. But are you also thinking new student loans will not be available for future college students?

One thing they could do is simply make college free for everyone… or subsidized. (Catch up on my initial comments on this in the August 18 Postcard.)

Reader comment: Loved following you all. The picture of you on the train to Waterloo really impressed me. The train was so clean. Are all of them that clean? I have never been on a train in the U.S. and think I would really enjoy it but I don’t know if they are that clean. Thanks so much for all that you share!

Yes, the trains in England – at least the ones we used – are clean. Next week I’m riding an Amtrak train from New York to Baltimore. So we’ll see how an American passenger train compares.

Reader question: I wonder if your children during their stay in London have learned to appreciate the brutality and inhuman treatment that the British Empire inflicted around the world on all indigenous cultures and people?

Isn’t it obvious? We make sure the kids learn about the dark side of history everywhere we go (as we did in Rwanda, when we visited a genocide memorial… and in Japan, when we learned about the atomic bomb in Nagasaki).

I read your question to Dusty and he replied “yes.”

And that’s all for this week… As always, thanks to everyone else who wrote in!

Please keep your questions and comments coming at [email protected], and I’ll do my best to address them in a future Friday mailbag edition.

– Tom Dyson

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