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Sometimes we’re wrong. We make mistakes. Bad luck happens.
In a discipline like investing, built on estimates and probabilities, it can happen often. And yet, being wrong is something people don’t think about very often.
The most important lesson – of all the lessons – in The Intelligent Investor, is the concept of margin of safety. Continue Reading…
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I don’t own smart beta funds because I don’t believe they fit my strategy.
Instead, I stick with a simple approach, four funds – a US, developed international, emerging markets, and treasury bonds – adjusting the allocation based on valuation. Basically, I move from expensive to cheap and if all equities are expensive then move from expensive to bonds.
That’s the simplified version. Continue Reading…
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Sound investment advice doesn’t change. Neither does investor worries or behavior. It may seem like it’s all new but it’s just being rewritten – slightly differently – over and over again. The books, articles, and stories just cycle along with the markets, where each new environment is an opportunity to update what was said in the past.
Case in point is a 100-year-old book (the link is below) I came across while digging for something else. Curiosity got the best of me – really it was an excuse to avoid work – so I browsed a few pages on investing circa 1917.
It’s always interesting to see how things were explained in the past. I thought I’d share a few century old ideas below: Continue Reading…
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I want to give a quick update on the site. For the past few months, I’ve been building out the backend for a new Library section on the site.
If you read the post from a week ago – Buffett Explains Bubbles – and clicked on the source link you got a peek at the new section. If you haven’t seen it yet, you can check it out here (I’ve since added some highlights from the transcript). Continue Reading…
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There’s a business behind most investments. Graham’s last bit of wisdom in The Intelligent Investor points to this – investing makes you an owner (stocks) or a claimant (bonds) of a business. Your success is a product of the businesses ability to earn money and pay its debts.
In the age of index funds, I think it’s easy for investors to overlook this fact. They’re one step removed. They own shares of a fund. And because they own shares of a fund, the returns of said fund become more important than the performance of the businesses held by the fund. Continue Reading…
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The last post covered a few things in the FCIC interview with Warren Buffett. One thing I want to touch on briefly is something Buffett kept mentioning – models.
I wish the interviewers would have asked a few follow-up questions because he kept referencing it. Here’s Buffett: Continue Reading…