Quote for the Week
Understanding that we do not know the future is such a simple statement, but it’s so important. Investors do better where risk management is a conscious part of the process. Maximizing return is a strategy that makes sense only in very specific circumstances. In general, survival is the only road to riches. Let me say that again: Survival is the only road to riches. You should try to maximize return only if losses would not threaten your survival and if you have a compelling future need for the extra gains you might earn.
The riskiest moment is when you’re right. That’s when you’re in the most trouble, because you tend to overstay the good decisions. So, in many ways, it’s better not to be so right. That’s what diversification is for. It’s an explicit recognition of ignorance. And I view diversification not only as a survival strategy but as an aggressive strategy, because the next windfall might come from a surprising place. I want to make sure I’m exposed to it. Somebody once said that if you’re comfortable with everything you own, you’re not diversified. — Peter Bernstein (source)
From the Archives
Last Call
- Turning on a Dime – Humble Dollar
- Can Economists Help Investors Avoid Recessions? – J. Rekenthaler
- 11 Nuggets of Wisdom from Joel Greenblatt – Behind the Balance Sheet
- A History-Lover’s Guide to the Market Panic Over AI – Economist
- 10 Investing Ideas You Probably Don’t Believe, But Evidence Suggests You Should (podcast) – Excess Returns
- Navigating the Sea Change with Howard Marks (video) – Oaktree
- Magnus Carlsen: Chess, Investing and Strategic thinking (podcast) – In Good Company
- The Death of the Magazine – Honest Broker
- The Forgotten Female Sharpshooter Who Surpassed Annie Oakley – Texas Monthly