Diminished Value
Sanjib Saha | Sep 18, 2021
A CRUCIAL STEP WHEN buying a preowned car is to scrutinize its Carfax report. A single-owner car with a regular maintenance history and which was driven solely for personal use should be a safe bet, while an accident record gives most people pause. All things being equal, a car that was in an accident, however minor, ought to cost less than a similar one with a clean history. Some bargain hunters don’t mind taking a chance on a car with an accident history as long as it drives well. After all, the discount can be quite attractive. This might seem unfair for a seller who wasn’t at fault for the accident. Even if the car was repaired to perfection and the tab was picked by the other party’s insurance, how does the owner recover the value lost? A recent accident forced us to find out the answer. We flew across the country to spend the Labor Day week with my brother-in-law. While driving us around in his almost-new car, he was rear-ended by a pickup truck. Thankfully, no one was hurt, and the car was still drivable. The pickup’s apologetic driver accepted fault and assured us that his insurance would cover all repairs. Still, we worried about the car’s market value. It turns out that my brother-in-law can recoup some of the loss through a diminished value claim. First, he needs to get a fair estimate of the loss of market value due to the accident. This might involve researching prices of similar used cars with and without an accident history, or even getting a free estimate. Next, he must contact the other driver’s insurance company and specifically request diminished value compensation. This amount would be on top of the repair and rental costs. The claim should be made in a…
Read more » Identity Crisis
Sanjib Saha | Jul 22, 2020
MAY 18, 2020, STARTED as an ordinary Monday. I was busy with office work. An email from our human resources department hit my inbox. It said something about fraudulent unemployment benefits. I couldn’t pay attention right away, so I saved it to read later. That evening, I found five letters from our state’s unemployment claims department in the mail. I’d never heard of such a department, but it reminded me about the email I got earlier. This time, I read the email more carefully. It turned out that someone had filed for unemployment benefits using my personal information. Many coworkers were also affected. They’d had little luck in contacting the state’s unemployment claims department directly. On behalf of the impacted workers, our employer was working with the department to flag these claims as illegitimate. Needless to say, I was surprised and worried. The letters from the state, dated between May 14 and 16, had bigger surprises. First, the department still seemed unaware that the claim filed on my account was fraudulent. Second, it appeared the department had started making payments without complete verification. The third surprise was most disturbing. Sensitive personal information about my employment and wages were included in the letters. I couldn’t tell whether that information was also sent electronically to the fraudulent claimant. That would surely make me a target for future, possibly more sophisticated, cyberattacks. I was curious about how this had happened, but first I needed to worry about my own vulnerability. My personal information had previously been exposed by a few of the well-known security breaches, including one involving my former mortgage lender. It had taken me months to sort out an identity-related tax fraud a few years ago. That experience was frustrating. The prospect of repeating that same drill was daunting. Sadly, I had no…
Read more » Aging Well
Sanjib Saha | Jul 3, 2023
LIKE MANY IMMIGRANTS living in the U.S., I regularly return to my hometown to visit family and friends. My trips to Kolkata are usually short and jam-packed, seeing not just contemporaries, but also the older generation, including aunts and uncles, my parents’ friends and my friends’ parents. My two recent visits—one last fall and the other this spring—were no exception, but I had mixed feelings this time. Most of the older generation are now in their 70s and early 80s, and two of them had passed away since my last pre-pandemic visit. I was happy to be able to catch up with the rest. But I was also saddened and surprised to find that, since my last visit, a few didn’t seem to be doing well emotionally, as if they’re struggling to find meaning in life. On the surface, health problems and mobility issues are to blame, but that alone doesn’t explain such a change within a few short years. With most of their family members or adult children living elsewhere, these folks have no one to lean on for day-to-day support. They resist getting professional in-home senior care services or moving to retirement communities. This mental block is cultural and emotional, not financial. Meanwhile, the rest of my older acquaintances seem to be having a great time in their golden years. They, too, face health and mobility issues, but these don’t appear to affect their positive outlook on life. The best example is my maternal aunt—my mother’s younger sister—whom I call Mashi. Despite dealing with several family tragedies within the past year, including losing her husband of 50 years after a long period of ill-health, Mashi remains upbeat and full of energy. If you were to guess her age based on appearance and activities, you’d probably be off by…
Read more » Ready or Not
Sanjib Saha | Mar 26, 2020
THE PAST FEW WEEKS have brought back memories of the 2008 financial crisis. Back then, stocks were at bargain prices, but I had little money to invest. Today, my financial house is much stronger—and I want to be ready to buy if stocks get dirt cheap. I’ve already made some portfolio adjustments. But from here, my plan is to keep an eye on stock market valuations. A large percentage drop by the market averages might—by itself—create the false impression that stocks are cheap, so instead I prefer to watch valuation measures such as the market’s price-earnings multiple, price-to-book value and dividend yield. What are these metrics saying? Despite a 27% drop from its peak, the S&P 500 isn’t exactly cheap. For instance, the cyclically adjusted P/E ratio, or CAPE, is still above its historical average by a large margin. Most other valuation measures paint a similar picture. At these levels, the odds of superior market returns are still low. I’ve decided to wait to overweight stocks, at least until valuations are closer to normal. I’d put a normal valuation for the S&P 500 at around 1800—a 47% drop from the Feb. 19 all-time high. That size drop has happened just five times, including two occasions since 2000. That’s when I’ll start shifting my asset allocation to overweight stocks. Until then, I’m fine with dollar-cost averaging my ongoing savings into my current asset allocation. Meanwhile, I’d consider stocks dirt cheap if valuations fall 25% below their historical averages. That would require a whopping 60% drop from the peak, taking the S&P 500 well below 1400. A drop of that magnitude, which would motivate me to bet big, hasn’t happened since the Great Depression. Even at the depth of the 2007-09 bear market, the fall was smaller. Think I’m daydreaming? Perhaps. The stock market…
Read more » Eye of the Beholder
Sanjib Saha | Jan 6, 2021
ARE JUNK BONDS RISKY? That was the question from a friend in his late 20s, whom I’ll call Josh. I answered that they were probably risky for him, but quite safe for me. Josh looked puzzled—until I explained that risk is in the eye of the beholder. Josh has a stable career that pays well, but he doesn’t plan to stick with it forever. Instead, he wants a job that relates to his passion for outdoor activities. His strategy? Sock away as much money as possible. Once he’s done saving for retirement, he’ll switch to a more interesting job that pays just enough to sustain his lifestyle. Josh has many years before he taps his retirement fund. He needs growth to maximize the power of investment compounding over his long time horizon. Income investments, whether FDIC-insured bank deposits or high-yield bonds, would endanger his nest egg’s growth prospects. He’s safer buying stocks and taking more risk. My situation is different. I’ll soon start to live off my investments. I’m always looking to diversify my portfolio’s income sources. I can live with small doses of high-yield bonds, preferred stock and senior bank loans to boost my cashflow. No, these investments don’t promise price stability. But I can count on these riskier sources of income for my non-essential expenses. All investments are risky in one way or another. But their risk should not be viewed in isolation. An investor’s own situation and objectives matter the most. An investment is risky when it doesn’t align with your overall financial goals. It’s safe when it fits well with the rest of your investments and it has a clear purpose in your portfolio. Consider two casino games. In the first game, there’s a 25% chance of doubling your money. Otherwise, you get back just half…
Read more » Relative Affluence
Sanjib Saha | Dec 6, 2022
WHEN RESTRICTIONS ON travel eased this year, I visited Kolkata, India, where I grew up and my mother still lives. The airline ticket and other travel costs were almost 75% higher than my last visit four years ago. This year, I’ve grown used to price shocks at every turn, from groceries to gas, so the steep ticket price didn’t shock me. What did surprise me was my feeling of affluence once I arrived. Traveling to a low-cost country as a tourist doesn’t necessarily feel like a bargain because most items still have an international price tag. But living like a local is another matter. Everything seems dirt cheap to folks from high-income countries. Curious to know how far my U.S.-earned dollars went during my stay in India? Consider: A dime would get me a freshly made hot tea from a roadside tea stall, served in a disposable earthen cup. For a nickel more, most sellers would upgrade it to a masala chai—milk tea flavored with ginger, cardamon and other aromatic spices. A quarter paid for the return bus ticket to my aunt’s place four miles away. What else could I buy for a quarter? How about a recently picked large guava to savor with rock salt, or a bag of fresh flowers that my mother needed for her morning offerings to the gods? A half-dollar would buy a hearty Bengali breakfast dish from an outdoor eatery, if you didn’t mind waiting while the cook prepares it right in front of you. The food would typically be served on a Sal leaf plate, to be trashed afterward in a designated bin. A dollar for a man’s haircut might sound like a promotional offer, but that’s the regular price in the neighborhood salon—and it wasn’t due to the thinning hair of its regular…
Read more »
Defining Enough
Mark Gardner | Jun 10, 2026
What do we Americans want? We want “free” healthcare
R Quinn | Jun 11, 2026
Quiet Failure: Time for Me to Say What I Think
Javier Escobar | Jun 11, 2026
Celebrating the Win
Sanjib Saha | Jun 11, 2026
Not missing the point
eludom | Jun 10, 2026
Better Alternatives to Buying an Annuity
DavidHLancaster | Jun 10, 2026
What Remains: Money and Me
Andrew Clements | Jun 10, 2026
How to Use AI With Your Portfolio
W.D. Housley | Jun 9, 2026
Would You Be Miserable?
Dan Smith | Jun 8, 2026
It’s The Little Things That Scare Me Now
Dennis Friedman | May 14, 2025
The Ping
Mark Crothers | Jun 4, 2026
Mourning the World
Jonathan Clements | Jun 5, 2026