Early Principles of “Investment Management”
Edgar Lawrence Smith concludes his classic book with the importance of “Investment Management.” I don’t know how original this concept was in 1924, but investment management is exactly like it sounds....
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Sitting at a Loss
Had you bought the S&P 500 on January 1st of any year since 1922, 68% of the time you’d have more money one year later. Using the Dow produces similar results — roughly 68%. Both those stats ignore...
View ArticleHighlights from Howard Marks’s Mastering the Market Cycle
Howard Marks’s latest book, Mastering the Market Cycle, is a compendium on the different cycles investors contend with. The book stands as a lesson on observation over prediction. It’s a solid addition...
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Defying Reversion to the Mean
Mean reversion is a powerful force. It drives market cycles, stock prices, profit margins, earnings, growth rates…you name it. Michael Mauboussin wrote a piece about it in 2007 based on ROIC. ROIC...
View ArticleRevisiting the ’87 Crash
On October 19, 1987, the stock market crashed. It was the worst single-day decline, almost doubling the previous worst day in 1929. Unlike in 1929, something unique happened this time. Questionnaires...
View ArticleFinding the Obvious
Oliver B. Adams grew up a poor kid who worked in a grocery store. He wasn’t a clever kid or imaginative. There was nothing special about him. Nothing, except for his obviousness. Yet, that simple trait...
View ArticleFred Schwed, Jr. Recalls the Great Crash
Fred Schwed had a front-row seat to the Great Crash. He worked at a trading desk of a brokerage house since he left college. A week earlier — on October 24 — was the first moment he realized something...
View ArticleWise Words from Peter Bernstein
Peter Bernstein had a deep understanding of risk. He understood risk in a way that most people don’t consider — how it relates to time, behavior, diversification, longevity — in their investment...
View ArticleThe Squeal that Set Off the Panic of 1907
And one cloudy day somebody asked for a dollar, and not getting it promptly enough, very promptly squealed. That squeal was the signal to the chorus of the entire world, which also wanted Money! Money!...
View ArticleThe Illusion of Permanence
Every bull market bust comes with lessons. One is that bull markets offer the illusion of permanence. For example, the longer a bull market drags on, returns are more likely to be normalized and...
View ArticleThe Price of Excellence
Some people happily pay a premium for quality. If you think a product — like iPhones, designer bags, or shoes — is higher quality, it might be worth paying more. Sometimes you actually get more than...
View ArticleWise Words from Seth Klarman
Anything written by Seth Klarman is hard to come by. His book, Margin of Safety, is out of print and can only be found used at a famously high asking price. His Baupost letters are highly protected....
View ArticleLessons from “Letters of a Self-Made Merchant”
John Graham was a wealthy pork packer based near the Union Stock Yards in Chicago. His son Pierrepont was headed to Harvard for his first year of college. That bit of news kicked off a series of...
View ArticleHitting the Links
I’m out of town for the week visiting family and playing some golf, so just the links today. Also, no posts next week because of the Thanksgiving holiday. I’ll be back to the regular grind after that....
View ArticleLessons From The Man Who Solved The Market
Jim Simons, and Renaissance Technologies, has one of the best track records ever. It’s also a mystery. Greg Zuckerman’s latest book, The Man Who Solved the Market, helps pull back the curtain — a...
View ArticleBuffett’s No Called Strikes
Warren Buffett often uses baseball to describe investing concepts. His no called strikes analogy is a reminder that doing nothing is an important option. Of course, it’s more important than ever in a...
View ArticleLessons from the Best Posts of 2019
As we head towards the year’s end, it’s a perfect time to review some lessons from the more popular posts of 2019. What you’ll find below is a collection of lessons from different posts written year....
View Article2019 Annual Blog Review
2019 has been a busy year. (This post is meant as a review on the year and what’s planned for 2020. Feel free to skip it, if that’s not your thing.) Every year I challenge myself with a new project....
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2019: A Year in Returns
Peter Lynch once said, “I’ve found that when the market’s going down and you buy funds wisely, at some point in the future you will be happy.” That quote sums up the transition in markets from 2018 to...
View ArticleSecondary Lessons from The Intelligent Investor
An outsider not familiar with Benjamin Graham might see The Intelligent Investor as an investing book past it’s prime. The book was first written in 1949. The fourth and last edition revised by Graham...
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