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Bernstein and Montier Discuss “Risk”

July 17, 2019

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Jon

Risk has a long list of definitions that make it unnecessarily confusing. Peter Bernstein sees risk as “the consequences of being wrong.” That’s a version I can get behind.

He contributed it to a great discussion with James Montier on how the different definitions of risks fit together, mainly whether volatility fits in and what it means for investing.

Ironically, Bernstein can see volatility as risk from a behavioral standpoint (hardly mathematical) because of the queasy feeling it creates. Montier sees volatility as opportunity.

In a sense, they’re both right. Volatility is the catalyst to a good or bad decision. The decision introduces the potential for risk — learned only in hindsight from the outcome.

Their discussion offers some food for thought: Continue Reading…
Quarterly Reading – Summer ’19

July 12, 2019

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Jon

It’s time for another quarterly reading update. It feels like I quit more books than I read over the last 3 months. For some reason, it was unusually hard to find books that held my interest beyond the first chapter. So I turned to a couple of classics to get back on track. Anyways, onto the books.

Here’s what I’ve been reading the past three months: Continue Reading…
2019: First Half Returns

July 10, 2019

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Jon

Global markets looked rejuvenated in the first half of 2019. Gains were seen practically across the board.

In the U.S., the S&P 500 shook off 2018’s 20% peak to trough decline to reach new highs. But it was foreign markets that topped the list.

Of course, for investors, you had to be in the market to earn those gains. And I doubt many expected market returns of this level in a mere six months. It just shows that timing is hard for a reason.

Here are a few observations before getting to the results: Continue Reading…
Favorite Lines from Fred Schwed’s Classic

June 28, 2019

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Jon

Fred Schwed’s classic Where are the Customers’ Yachts? delivers simple financial truths with a side a satire. He presents the unvarnished view of Wall Street as he saw it:

…thousands of erring humans, of varying degrees of good will, solemnly engaged in the business of predicting the unpredictable.

The book is filled with more great lines about timeless lessons on investing, speculating, and Wall Street.

I thought I’d share a few of my favorites: Continue Reading…
Where Are The Customers’ Yachts? by Fred Schwed Jr.

June 27, 2019

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Buy the Book: Print

Fred Schwed delivers a cynical, sarcastic, insiders perspective on the business of Wall Street. His book stands as a timeless warning to investors and speculators alike.

The Notes

Continue Reading…
Buffett: Picking Winners is Hard

June 26, 2019

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Jon

Transformative innovation creates an explosion of new businesses followed by a surge of extinctions. Picking the winners is hard.

Warren Buffett tried to teach this lesson to a group of business leaders in 1999. To say it was well received would be an understatement.

None of the new Dot-com royalty cared to listen to an old man, out of touch with the new reality, saying most of their companies were doomed to failure. To them, no price was too high to pay for their good idea. It was a twisted view born out of the excesses in rising stock prices.

In the end, Buffett was right. But at the time, all he had was an argument built around common sense, facts, and history. Here’s how he relayed it in a speech at the Sun Valley Conference in July 1999: Continue Reading…

Bernstein and Montier Discuss “Risk”

Quarterly Reading – Summer ’19

2019: First Half Returns

Favorite Lines from Fred Schwed’s Classic

Where Are The Customers’ Yachts? by Fred Schwed Jr.

The Notes

Buffett: Picking Winners is Hard