Some Perspective On One-Day Market Losses

I spent some time Monday morning watching reactions to the stock market. Thanks to social media, everyone has a front row seat to the greatest sideshow on Earth – investor behavior. Monday did not disappoint.

I have two Twitter accounts, one for the site where I follow a wide range of financial types (broken into groups: top finance, financial advisors, value investors, and financial media. BTW, value investors were the most calm – well done!) and a personal account that follows non-finance folks. Continue Reading…

Marks on His Investment Philosophy

Howard Marks gave a talk at Google back in March ’15 where he covered the origin of his investment philosophy. I scribbled some notes as watched it. I thought it was time to organize things and post it here.

His book, The Most Important Thing, is his investment philosophy. He admits that his most important things have changed over time. His thinking is always evolving. The goal was to show that investing is hard, counterintuitive, and to teach people how to think.

During the talk, Marks highlights where the roots of his philosophy started: Continue Reading…

A Few Things I Believe

Everyone has their opinions and beliefs. Some are based on facts. Others are based on some aberration of our mind.

Investing is full of facts. The relentless stream of data can be used to argue anything. And it’s used to support every opinion possible because facts can say whatever you want them to say.

Your job and mine is to come to some consensus about what to believe or not. Below, I’ve laid out some of my own beliefs developed over the years. You can decide which is more opinion than fact.

Continue Reading…

Building a New Investment Process

Investing has a few basic truths we should accept: strategies require time and human nature often acts against our best interests.

Time is a dual problem – time required to do the work and time for the strategy to work. I’m dealing with the former which is the point of this post.

I’ve flirted with the idea of changing strategies over the past year. A lack of time gives me the excuse to move forward. Continue Reading…

Investing Lessons From Ted Williams

Fat PitchBaseball is one of the few sports where you can fail 70% of the time and still have a great year. Players are paid millions to do just that. And the mutual fund industry follows a similar model. But I digress.

Only 13 MLB players have breached the .400 barrier since 1900. In 1941, Ted Williams hit .406 while the league average was .262.

He was the last to do it. He was one of the greatest hitters ever because of his tireless work ethic, obsession for hitting knowledge, and discipline.

Over time, Williams simplified his batting process down to only swinging at good pitches he could hit. He stacked the odds in his favor.

First You Need a Good Ball to Hit

Always a fan of analogies, Buffet uses Williams’ process to explain his investment philosophy: Continue Reading…