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…
Incentives Matter
Let me give credit where it is due up front. This blog title is not from my own mind. I borrowed it from a number of places including a presentation…
Time in the Markets Beats Timing the Market
I recently received another one of those “Free Steak Dinner” invitations, where some financial advisor shares his thoughts about retirement planning. Now, I know from experience that this is either…
Market Forecasts are not useful
In order to forecast the future movements of an equity market you need to know several things, but I want to keep this discussion as simple as I can. Perhaps…
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…
This Time is ALWAYS Different
The US stock market can be viewed through the lens of the S&P 500 index, even though this omits thousands of smaller companies and stocks. We will use it here…
The Market is Smarter than You Are
Let me approach this one from two different angles. Point number 1: People who predict the market for a living are bad at it. Point number 2: There are a…
The 85% Fallacy
I frequently run across “advice” from financial planners, and salesmen who focus on mutual funds, annuities and similar items that suggest that retirees need 80-85% of their pre-retirement income to…
The Four Letter Work is R-I-S-K
It seems fair to say that the biggest single topic in the financial media related to investment management for the doit yourself investor is RISK. The Risk of outliving your…