The BBC interviewed Charlie Munger in 2012 and Munger in that interview states that “you can never take the booms and busts out of a capitalistic economy.” He goes on to say that he and Warren Buffett have seen their portfolio drawdown by 50% three times over the years. Charlie says this is a part … Read more
Warren Buffett, Charlie Munger, and Jack Bogle have all learned from someone. Buffett and Munger both studied under Benjamin Graham. Buffett and Bogle both refer to John Maynard Keynes as one of the most influential people in their investment learning process. Keynes is considered one of the greatest economists in the history of the world. … Read more
The stock warehouse is a simple example of how to explain value versus price in the stock market can get forgotten in a crisis or major event to my kids. In order for some to grasp the concept of value versus price it sometimes takes putting the explanation in real world terms, so they can … Read more
If there’s one thing for sure about the stock market it’s that there are super smart people out there investing and trading the markets. Brilliant people. People with high IQ’s and excellent investing senses. Today, many smart institutional investor’s have realized the power of using computers to execute their trades using software programs and algorithms … Read more
In a press release dated April 21st, 2015 Dalbar research posts a chart from their annual Quantitative Analysis of Investor Behavior (QAIB) study for 2014. Below is the chart. The chart shows the cumulative returns by time or years of investors versus the S&P 500 Index and Barclays Bond Index. According to their study you … Read more
Below is an information graph of data from the US Census Bureau showing the US population broken down by age estimates as of July 2018. Studies have shown that on average a person’s highest earning years are between the ages of forty-five and fifty-five respectively. The logic behind this data is that most families have … Read more
In Ken Fisher’s book Markets Never Forget, But People Do he presents two tables as shown below. The first table shows below the historical effects of past bear and bull markets and their durations. As you can see historically since 1929 the longest bear market was from 1937 to 1942 about five to six years, … Read more
I know market timing is considered a bad word in investing, but like it or not it matters. Below are screen shots from a the blog The Fat Pitch by Urban Carmel and his article titled When “Buy and Hold” Works, and When it Doesn’t.” He performed a study of long term time periods using … Read more
Throughout many of the books I’ve read by successful investors there is one common tactic to the successful methods of different investors. This tactic is “rules based investing.” In passive investments such as indexing after developing a balanced portfolio based on the investor’s risk parameters rebalancing a portfolio annually to keep their balanced allocations in … Read more
Active Investment Management: Active management (also called active investing) refers to a portfolio management strategy where the manager makes specific investments with the goal of outperforming an investment benchmark index. Passive Investment Management: Passive management is the opposite of active management in which a fund’s manager(s) attempt to beat the market with various investing strategies … Read more