One of the many seductions of dabbling in the stock market is the potential for lottery winners. Look at the returns these stocks have generated since going public: Starbucks: ~18,000% Amazon: ~21,000% Apple: ~28,000% Microsoft: ~72,000% Disney: 128,000% What many investors don’t know or don’t seem to care about is that for every Apple, there…
Hear Me Now
I recently sat down with Aaron Watson to discuss how I wound up where I am today. Aaron had a similar experience to me in the insurance world and reached out to me for some advice. I met with Aaron and happily agreed to do a podcast with him. We spoke about my beginnings and…
Patterned By Birth
What if stocks experience their third separate bear market in under twenty years? What would that do to the psychology of investors? For the purpose of this exercise, please allow me to reach a little (I’ll explain later). If the S&P 500 were to fall 25% from its peak over the next twelve months (~16%…
Leaving Your Comfort Zone
“In my whole life, I have known no wise people (over a broad subject matter area) who didn’t read all the time – none, zero.” Charlie Munger I can think of few people I would rather emulate than Charlie Munger. So in an effort to walk the walk, I’m challenging myself to read things that…
The Great Jim Simons
I want to share a terrific video of Jim Simons speaking to an audience at MIT. Simons is a mathematician, hedge fund manager and now philanthropist so it’s no wonder that his firm is called Renaissance Technologies. In this talk, Simons shares stories about riding a scooter from Boston to Bogota, getting fired from the Institute…
Munger On The Circle Of Competence
I always enjoy taking a few minutes to flip through Poor Charlie’s Almanack. I found the following passage particularly interesting and wanted to share it (Emphasis mine). Munger discusses the importance of “The Circle of Competence,” which helps explain what has fueled Berkshire’s unrivaled performance over the last several decades. The cash register was one…
Have Bonds Failed?
The S&P 500 just experienced its worst month since September 2011, falling 6.3% in August. With such a steep decline, the investor in a classic sixty/forty portfolio might have expected bonds to provide protection to their portfolio. The negative 0.08% total return for the Barclays Aggregate Bond Index might lead them to think there’s something…
Volatility Brings Out The Worst In Us
The following exchange is what often occurs on Twitter, especially when markets are volatile and account balances are going in the wrong direction. “Why are you yelling at me?” “Because we have different views on how to make money in the market!!” Social media has changed the game for the better. Unfortunately there will always…
Beware (the Stories) of the Death Cross
On Friday the S&P 500 experienced what is known as a “death cross.” This is when the 50-day moving average crosses below the 200-day moving average and as you can guess by the name, is allegedly a negative signal for stocks moving forward. A lot of work has been done to debunk the myth of…
Actual Buyers
A lot of the movement in stocks over the past few trading sessions has happened overnight. During the past 5 days, the overnight gaps have totaled 13.14% which is something SPY hasn’t done since October 2008. What’s interesting is that over the last two days we’re finally seeing some buying taking place between 9:30 and the…
