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
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
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