“If no one ever took risks Michelangelo would have painted the Sistine floor.”  -Neil Simon “Take calculated risks.  That is quite different from being rash.”  -George S. Patton “Be brave.  Take risks.  Nothing can substitute experience.”  -Paulo Cuelho The verb of experience is defined as “to encounter or undergo an event or occurrence.”  Makes sense.  … Read more

The Investor’s Worst Enemy

If you are an investor your worst enemy is you.  We all doubt ourselves, or do things without putting in the proper work, or make impulsive decisions without a plan.  Many of the professional investment books written by professionals with successful track records address this topic, since it’s the hardest aspect of investing to conquer.  … Read more

Performance Fees – Make it Fair

In 1940 Congress created the Investment Act of 1940.  This Act was essentially rules created to stave off another stock market crash like the one that happened in 1929.  The Investment Act of 1940 was put in place to better regulate the investment industry. One of the provisions of the act is that it permits … Read more

Wine and Investing

I love wine.  Wine is more than a drink or a beverage.  It’s a journey. A story from somewhere I am not.  When I taste a wine it takes me to the place where the wine was made.  It creates visions of the land, the scenery, the grape vines growing, the earth of each vineyard, … Read more

Financially Trapped

In the highly successful book Rich Dad Poor Dad by Robert Kiyosaki, he discusses the traditional lifestyle choices of a family and the usual general advice given to their children of studying hard and getting good grades.  They are asked to finish high school and college so they can find a good job when they … Read more

Your Top 5

Every investor should have a top five.  These would be the investor’s five favorite companies that they would want to own.  These five companies should be businesses that you would like to own for the next ten years. Ten years is important because the longest recovery period in the last one hundred years in the … Read more

Eliminating Non-Market Risk with Diversification

After purchasing 6 or 8 stocks in different industries, the benefit of adding even more stocks to your portfolio to lower non-market risk is small. Overall market risk will not be eliminated merely by adding more stocks to your portfolio. Number of Stocks Held % of Non-Market Risk Eliminated 2 46% 4 72% 8 81% … Read more

A Few Bubbles & Major Crashes Throughout History

Dutch Tulip Mania 1634-1637 South Sea Bubble 1720 Mississippi Bubble 1718-1720 British Railway Mania Bubble 1840’s Florida Real Estate Bubble 1920’s Stock Market Crash 1929 Kuwait’s Stock Bubble Crash 1980’s Black Monday 1987 Japan’s Bubble Economy 1980’s Tech Bubble 2000’s Great Recession 2008 Flash Crash 2010 “From 1900 to 2013, the US stock market experienced … Read more

Body Chemistry & Behavioral Investing

Winning Our brains are designed to perceive trends. If a trend repeats a natural chemical called dopamine is released causing the soft euphoria feeling. If a stock goes up a few times in a row your brain chemistry changes giving you a “natural high.” You effectively become addicted to your own predictions. Losing A financial … Read more

Financial Newsletter Success

Mark Hulbert, editor of the Hulbert Financial Digest, monitors the real-time records of financial writers who report their recommendations in newsletters.  He has tracked the performance of these adviser over the past 26 years, and here’s what he finds: Of the 35 newsletters that existed in 1980: only 13 are still in business today.   … Read more