Novel Investor • Page 8 of 13 • Compounding investing wisdom...

What Type Of Investor Are You?

February 10, 2016

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Jon

There has been a growing upheaval in investing as we throw out overused theories and reintroduce behavior, redefine risk, and question labels that have been used for decades.

None of this is new. It was simply written off and ignored for a perfect and faulty efficient market belief. Ben Graham offered up behavior’s role in investing back in 1949 with the story of Mr. Market. After that, emotion was magically removed from the markets and common sense has finally brought it back. Continue Reading…
Happy Hour: Time Blindness

February 5, 2016

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Jon

I started rereading The Intelligent Investor this week and wanted to share a quote. The discussion revolved around the view at the time – this was about 1970 – that investors should consider an all-stock allocation due to the worry of higher inflation.

Of course, there’s always something to worry about and Graham’s answer fits a broader allocation question that gets asked all the time – should I own more or less of something else because of the worry of the day? Continue Reading…
Book Review: Invest with the House

February 3, 2016

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Jon

The idea of investing alongside great investors is nothing new. Investors have attempted to emulate Buffett for decades. Studies, stock screens, and more try to decipher exactly what drives his performance. But what if they settled for a close second and just copied him?

Invest with the House, by Meb Faber, answers that question and more.

Buffett’s not the only one with a track record of beating the market. The book digs into twenty successful hedge fund managers (most managers fall into the value camp though each has a slightly different style), clones their stock picks, compares the results to the market (the S&P 500), and provides an easy process to follow.

Essentially, Faber created a stock portfolio for each fund manager, going back to 2000, based on an equal weighting of their ten largest holdings at the time and rebalanced quarterly as holdings changed. Continue Reading…
Happy Hour: On Demand Returns

January 29, 2016

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Jon

We’ve come to expect good instant results. You can get everything you want (well…almost) either instantly or within the hour thanks to the on-demand economy. And if you can’t get it, I’m sure Amazon will eventually make it happen, with one exception – investment returns.

On-demand returns don’t exist. Accept it.

Impatience has no place within investing. You have to wait for good returns. Continue Reading…
Buffett’s Earliest Take on Sentiment

January 27, 2016

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Jon

The year is 1950. It’s Christmas. Buffett is 20 years old and Barron’s publishes a letter from a “Mr. Warren Buffett, of Omaha” (I’m assuming it’s the “Mr. Warren Buffett, of Omaha” being quoted here since this was pre-Oracle of Omaha days. There’s always a slim chance another one existed, which I’ll take).

In a prior issue, Barron’s asked readers to comment on how they used the new Market Laboratory section of the paper. Fifteen people responded including Buffett. The excerpt of his letter is below (you can find the complete article at the end of the post). Continue Reading…
Happy Hour: Times Like These…

January 22, 2016

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Jon

…Are when investors really learn if they’re cut out for their investment strategy…do they actually walk the talk or not?

…Are when buy and hold investors learn if they really can buy and hold…or even rebalance.

…Are when they learn if their allocation really lives up to their risk tolerance. Continue Reading…

What Type Of Investor Are You?

Happy Hour: Time Blindness

Book Review: Invest with the House

Happy Hour: On Demand Returns

Buffett’s Earliest Take on Sentiment

Happy Hour: Times Like These…