Lessons from the Best Posts of 2024

It’s time to wrap up 2024. Every year, I do a quick review of the blog. It’s a way to highlight some things you might have missed and some of the greatest hits that gained the most traction.

This year, the blog grew by:

68 new blog posts. The most read are below.
12 new book notes. That brings the total to 96 books.
91 new quotes. There are 1,171 quotes in the collection. Peter Lynch and Risk Management quotes were the most popular in 2024. Same as last year.
113 new pieces in the Library.
89 longer quotes from those pieces added to the Notebook. There are now 1,387 sorted by investing topic and author available to members.

I also joined BlueSky a year ago and started posting recently. It’s the less toxic version of Twitter. Bluesky lets you control the algorithm, for now at least, based on who you follow, block, etc. You have a choice. The algorithm is not forced on you. So far it’s more useful in finding relevant, interesting discussions on investing, finance, and economics without the emotional manipulation pushed into your timeline. Check it out and follow along if you’d like. I plan to be most active there going forward.

Fifteen years of writing have taught me that it’s anyone’s guess what happens after I hit publish. What post gains traction? Which falls flat? It’s as unpredictable as markets. It’s also a fun surprise to see what you, the readers, find most interesting. So thank you for reading and sharing!

This year’s “best” list include a story about how a simple checklist saved lives (and how you can use it in investing), the benefits of investor ignorance, how investors can fail often and still succeed in markets, and a few wise words from great investors. The book notes that resonated the most appear at the end.

Finally, this is the last week for posts of 2024. Have a Happy Holidays and a prosperous New Year!

The Negative Checklist: Reducing Errors – Dr. Pronovost noticed a higher rate of infection among patients with arterial lines. He created a simple checklist to reduce the infection rate in patients. His checklist reminded doctors what they already knew, created repetition, set a minimum standard of performance, and in turn errors dropped to near zero. Investing has a similar human error problem that could be solved with a simple checklist.

A Cautionary Tale of Forecasting – Irving Fisher was the most popular economist in the 1920s. He’s most known for his infamous bullish call weeks before the 1929 crash and his optimistic forecasts continued through 1931. But what you may not know is that Fisher bet all his money on it too. Fisher’s story is a lesson all investors can learn from.

Wise Words from Jim Simons – Jim Simons died in May of this year. He was the force behind the most successful hedge fund ever, the Medallion Fund. That type of success draws a ton of interest but it was/is a black box. In rare interviews over the years, he hinted at the reasons behind his success.

Wise Words from Bill Miller – Bill Miller had one of the greatest investment streaks ever even though he chalked it up to luck of the calendar. His 15-year streak of outperforming the S&P 500 would have ended much sooner if the calendar year started with any month but January. Humility aside, Miller’s value approach differed in that it led him into areas of the market avoided by his peers.

Challenging the Process – The outcome bias says that we tend to judge decisions based on the outcome as opposed to the decision itself. You see it often in sports. Fans praise coaches after a win but pan them after a loss. There’s no nuance, no accounting for randomness or uncertainty. The outcome dictates the fans’ view of the coach’s decision. Bill Miller explains why investing has a similar problem with outcome bias.

When Market Ignorance is Bliss – Richard Thaler’s research suggests that investors might be better off not checking their portfolios daily. He found that the combination of two biases — myopia and loss aversion — leads investors to see their long-term portfolios through a short-term lens, overreacting to market losses and selling.

Wise Words on Passive Investing – The rise of passive investing has been a net benefit for investors despite the widespread criticism from active fund managers. However, what’s interesting is how some of the more successful active managers agree.

Sandpiles and Market Unpredictability – Researchers created a sandpile game in an attempt to help them predict avalanches. What they found was unpredictable. Sandpiles, like markets, are complex systems that organize toward a critical state. Any grain of sand can create instability and trigger a cascade of any size at any time. Markets are only different in that instability can lead to unpredictable rallies or declines.

Lessons in Business and Life from Andrew Carnegie -Andrew Carnegie changed the steel industry and, in the process, transformed how companies were run. His autobiography held several lessons on business, life, and investing.

Failing to Succeed – To stay competitive, companies need to experiment and try new things. Trying new things means failing at times. Those failures offer lessons that lead to future success. Investing is no different. Failure is common in investing. So common that the long-term success of index funds shows that you can fail frequently and still come ahead.

Book Notes: The four most read book notes this year are below.

The story of Sir Earnest Shackleton’s expedition — The Endurance — did not make the list but was a personal favorite this year.

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