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…
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…
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…
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…