The market had a rough week and the financial media was handed a plethora of scary statistics on a silver platter. When markets evoke emotions, its really important to stay away from reading or watching things that can cause you to make bad decisions. I took the liberty of collecting some articles and to my…
The Power of Framing
Daniel Kahneman, one of the pioneers of behavioral economics, describes framing in his Thinking, Fast and Slow: “Framing effects: Different ways of presenting the same information often evoke different emotions. The statement that ‘the odds of survival one month after surgey are 90%’ is more reassuring than the equivalent statement that ‘mortality within one month…
What Makes a Great Investment Article?
Morgan Housel is one of my favorite writers in all of finance. He had this to say on what makes an investment article great. Morgan believes that the best posts are evergreen and I totally agree. One of my favorite pieces of all time comes from Jason Zweig, written in 2001. This post will be…
Obliterated
There has been a lot of talk about how just a few leaders are responsible for buoying the markets. You might be thinking about the outsized gains in Netflix and Amazon, however, we are seeing massive relative out performance of the larger stocks not just in the S&P 500, but in the Russell 2000 as…
Looking Inside The Market
Although U.S. equity indices are hovering near all-time highs, the average stock in the Russell 3000- which covers 98% of the investable market- is already in “bear market” territory. How can it be that the average stock is down 20% from its 52-week high while the index is just 2.9% from its all-time high? There…
Paul Tudor Jones, Analogs, and Jeff Bezos
More Money Than God by Sebastian Mallaby is one of the most entertaining finance books I’ve ever read. It’s like the Market Wizards series, only in story form. I found myself scribbling notes all over the place and wanted to share a few pieces that I found particularly interesting, emphasis mine. Analogs “A story in…
Twas Ever Thus
One of the greatest top ticks of all time comes from the October 1968 edition of New York Magazine (emphasis mine): “You’ll hear fabulous success stories- like the hedge fund guy who made 20 per cent on his money in a week, for seven weeks in a row. ” “If, then, our hypothetical hedge fund can…
Some Thoughts On Emerging Markets
Emerging Markets have been performing awfully lately. And by lately, I mean the last six years in which little progress has been made. To make matters worse, there was a huge opportunity cost of having capital allocated away from U.S. equities. After six years of sideways movement, Emerging Markets are beginning to really move again,…
Is Momentum Misunderstood?
Howard Marks is a brilliant thinker and one of the most thought provoking investors out there. More importantly, he walks the walk and is the owner of a superb track record. Now that due praise is out of the way, I believe Marks is unfairly critical of technical analysis, specifically on momentum investing. From his…
Does This Time Feel Different?
The Dow Jones Industrial Average is now falling for a seventh straight day. As weakness begets more weakness, you might be thinking to yourself, “this time feels different.” You’d be right, this time does feel different. It always feels different. The reason every potential correction feels different is because we aren’t wired to remember exactly…
