Investing Tag Archive

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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The career, business or investment with the best ROI is often dismissed and not well documented

(Excerpt from The Interesting Times 23 Apr 2021 by Taylor Pearson) If you stumble on what looks like a great opportunity that the market is ignoring, 99 times out of 100, the market as a whole knows something you...

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Good companies always look overvalued

(Morgan Housel at FinTwit Summit 2021. Paraphrased) One thing that has been persuasive to me over time, is that good companies always look overvalued. Always. If we are talking about individual stocks, not about market...

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Think more before you act

(Excerpt from The Almanack of Ravikant) We waste our time with short-term thinking and busywork. Warren Buffett spends a year deciding and a day acting. That act lasts decades....

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Value investing is about identifying mispricing

(Excerpt from Staring into the Valuation Abyss) I think there is a lot of confusion out there about what Value investing is. Lots of people seem to think it’s about buying really crappy companies for low multiples....

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Compounding is returns leveraged with time

(Excerpt from Last Man Standing by Morgan Housel) … compounding is just returns leveraged with time. Earning a 20% return in one year is neat. Doing it for three years is cool. Earning 20% per year for 30 years...

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