Stephen Greenspan, is a psychologist and author of the book “Annals of Gullibility: Why We Get Duped and How to Avoid It.” Greenspan’s book was published in 2008, and uses events like the Trojan Horse, Iraq and the inability to find weapons of mass destruction, and the faulty science with cold fusion as examples to … Read more
In December of 2009, the Wall Street Journal ran an article titled Best Stock Fund of the Decade. For the ten year period from 1999 until 2009 the CGM Focus Fund on average gained 18% per year. Achieving 18% per year returns would mean an investor could double their money every 4 years. As an … Read more
Below is a story posted on Twitter and the article from MarketWatch. It’s a sad story, but often true. I’ve been in the market for over thirty years, and I’ve seen it ruin friendships, wipe out people’s accounts, destroy people’s lives, and result in suicide. Never trade on margin, or get into products you don’t … Read more
In Robert Kiyosaki’s highly popular book titled Rich Dad Poor Dad he shows the difference between assets and liabilities, and further discusses the topic of your home. He says a home is a liability, and not an asset. He’s right. Even though your home is an emotional piece of what you own in your life, … Read more
The best data is usually a large sample of data when trying to infer patterns or results based on occurrences. Insurance companies use actuaries tables consisting of large data to determine their exposures to a potential risk. As an example, the insurance companies have compiled many years of historical data for a young driver having … Read more
Jim Simons, the famous mathematician and hedge fund manager of Renaissance Technologies, has built a money management empire based on using mathematical models. Renaissance manages an estimated $21 billion throughout its funds, and it’s $3.5 billion Medallion Fund has amassed estimated annual returns of 35% since March of 1988. Models are a powerful tool in … Read more
Recently, I was having a conversation with an investor regarding her investments. Most of her stock investments are passive index based. We discussed the current investment environment and she was having thoughts of possibly taking some of the profits she has and diversifying a bit more. She wanted to add a small portfolio that consisted … Read more
When it comes to investing there are essentially three risks, systematic, unsystematic, and behavioral. A brief understanding of these risks are as follows: Systematic risk: is the risk of the overall market. When the entire market rises or falls that is considered systematic risk. A dropping tide lowers all boats theory. Unsystematic risk: is the … Read more
Growing up in the Hawaiian islands was a treat. Especially, if you surfed, and I did. I remember as a kid watching the big wave riding surf contests held at Waimea Bay, Sunset, or Pipeline on the North Shore of Oahu. Back then the big wave surfers used longboards called guns. They would paddle these … Read more
Using long term thinking when investing is very important. It’s greatest importance will be felt in the long run on performance, but it matters most when evaluating your investment allocations and the investment’s you want to include in your portfolio. For example, if you have twenty years, and you prefer a passive approach to investing, … Read more