Investing Tag Archive

Buy as much as you can when the market crashes 30-50%

(Excerpt from Just Keep Buying by Nick Maggiulli) The next chart illustrates this. It shows the distribution of your annualized returns if you were to buy during any month when U.S. stocks were down by 30% (or more)...

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Keep losses small to tolerate poor accuracy

(Excerpt from Think & Trade Like a Champion by Mark Minervini) Most people are surprised when I tell them I would rather be able to maintain profitability at a 25 percent batting average than a 75 percent batting...

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We all have an Emotional Stop-Loss

(Excerpt from Think & Trade Like a Champion by Mark Minervini) Everyone has an “emotional stop-loss” whether they like it or not. The point at which you can’t take it anymore is your emotional stop. For most...

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Two types of traders inside us

(Excerpt from Think & Trade Like a Champion by Mark Minervini) There are two types of traders inside you and me and everyone. One I call the builder— disciplined and process-driven. The builder is focused on...

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Songhurst Matrix

(Excerpt from Notes on Charlie Songhurst by Misha Saul) Boring and Complex Boring + Complex = low psychological appeal –> low competition –> high potential returns. Boring and Complex might also be...

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Mean reversion is the most ironclad rule in financial markets

(Excerpt from What Works In Wall Street by James P. O’Shaungnessy) The most ironclad rule I have been able to find studying masses of data on the stock market, both in the United States and developed foreign markets,...

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Books that define each decade of investing

(Excerpt from The Books That Help Explain Every Market Cycle of the Past 80 Years by Ben Carlson) 1940s: Where Are the Customers’ Yachts? by Fred Schwed Schwed did a wonderful job exposing Wall Street and its...

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Shannon’s Demon – Rebalance regularly if your investments are volatile

(Excerpt from Fortune’s Formula by William Poundstone) Imagine youstart with $1,000, S500 in stock and$500 incash. Suppose thestock halves in price the first day. (It’sa really volatile stock.) This gives...

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Volatility affects compounding return

(Excerpt from The Iron Law of Volatility Drag by Taylor Pearson) You have two return streams (a return stream could be a stock, bond, particular trading strategy, etc.) You know that both will average an annual return...

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Beating the market may not be necessary to reach your financial goals

(Excerpt from How I Invest My Money by Joshua Brown and Brian Portnoy, chapter by Ashby Daniels) I believe the quest to squeak out a few extra basis points of return is a waste of time for the typical Main Street...

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