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Three choices exist for every investment decision – buy, sell, and do nothing. Probably the most overlooked part of each choice is taxes.
Taxes are decided by what you buy, what you paid for it, what you’re paid while you own it, when you sell it, and what you sell it for. Simply, income and realized gains get taxed. Gains are a direct result of buying and selling. Notice, there is no capital gains tax for doing nothing. Continue Reading…
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You don’t have to look far to find someone proclaiming what will happen next. You see it in sports, politics, and especially the markets.
Someone always knows the outcome before it happens. If the person sounds smart and confident enough, some people listen. And some spend good money for the information, so they can risk even more money for the hope of great results. Continue Reading…
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Most people only want to look at the upside. How much money can I make? How big of a return can I get? Big wins are important.
Few people ask, “How much can I lose?”
You should always play offense and defense with your portfolio. Continue Reading…
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For some reason, the idea of contrarianism has popped in my head these past few days (probably from something I read but can’t remember what). The idea of a contrarian view gets tossed around a lot in investing.
Understandably, if you want to outperform most investors you need to invest differently, independent from most investors. You’re betting against the crowd, which is not an easy thing to do. It can feel like you’re trying to walk into a stadium just as the game is letting out. Most people understand this concept, but few actually follow through with it successfully because they give up before they get to their seat. Continue Reading…
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Earlier this summer, Howard Marks did an episode of the Masters in Business podcast. Several topics were covered from risk control, market cycles, predicting the future, and understanding the past.
There was some mild interest in my notes on a previous presentation Marks gave on his investment philosophy. So I went back and organized my notes from this interview as well. Continue Reading…
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In the last post, I covered a few of Seth Klarman’s investing principles from a presentation he gave to a Columbia MBA class. He briefly discussed one place he looks for opportunities. Klarman likes to take advantage of mindless selling.
One of the downsides of mutual funds and index funds are the rules defining what a fund can and can’t own. The rules dictate what gets bought or sold. Klarman offered up a couple examples: Continue Reading…