Investing has Been Solved (Sort of) – Part II
Let’s get the idea that will enrage most people out of the way first. When it comes to long term investing (and there is no other kind) our simple rule…
Expected Economic Growth and Stock Returns are NOT Related Even Though They Are
In MBA courses on Supply-Chain Management we often conduct an exercise that we call the Beer Game. In this game we set up a mock supply chain where there are…
The Market is Forward Looking
As a Professor of Operations Management I am often reminded of the huge contribution of Andray Markov. Markov was a Russian mathematician who dedicated most of his professional life to…
Why Stock Picking Doesn’t Work – and Why You are Going to Try it Anyway
Whenever we find ourselves forced to make decisions with limited information, we are most likely to use a decision rule or heuristic based on prior experience. This approach is easy…
Warren Buffet Proves Markets are Inefficient – Right?
Any time I suggest to a potential investor that mutual funds are not likely to be their best approach to obtaining wealth because a stock picker is not likely to…
Efficiency: Part 3
I ran across an interesting question recently. If GDP growth has averaged roughly 3% per year for the past 50 years, and inflation also averaged around 3% per year over…
Efficiency: Part 2
I had a classmate in my MBA program who left his job as an equity analyst to come back to college to get an MBA. The longer-term goal was to…
Efficiency: Part I
In the context of investing we all would like to “buy low and sell high.” A profit is made when you sell something for more than you paid for it.…