Fables and fairy tales are poor excuses for an investment philosophy. Too many investors have bet their life savings on the financial version of Science Fiction. The concept of evidence based investing takes an entirely different approach. Wide diversification, concentration on certain factors, and low investment friction (i.e., minimized taxes and fees) combined with a…
The Perfect Investment
Imagine an investment that could: Reduce the overall rate of depression by 50%; Cut alcoholism and suicide by 66%; Slash I.V. drug use and domestic violence by 75%; Markedly upgrade worker productivity; and Diminish the need for expensive incarceration for our citizens. This is not a publicly traded or private security. This investment has the…
The United States of Market History Amnesia
“The events of future history…will be of the same nature-or nearly so-as the history of the past, so long as men are men.” – Thucydides-Athenian Historian and General Investors need an applied historian for a financial advisor. Being a former history teacher, I appreciate the skills I learned from my college major more than ever…
Don’t Let What You Cannot Do Interfere With What You Can
“Just keep going. Everybody gets better if they keep at it” -Ted Williams, Red Sox Hall of Famer Blaming the umpire does not work. If investors get caught looking at a called third strike, it is their own fault. Sports, like investing, is about sticking to a repeatable routine through both bull and bear markets. “It…
The Positive Power of Negative Investor Thinking
Maybe investors should be “nattering nabobs of negativism.” This expression, coined by Spiro Agnew (honorary captain of most crooked ex-Vice Presidents) has some validity. In other words: Embrace the suck! In the age where everyone gets a trophy, and self-esteem is falsely built up (without accomplishment to back it up), maybe investors should go against the…
Being Smart About Money Begins With How It’s Taught
Newsflash: Financial Literacy Month does not work! Do you remember anything from your seventh grade math class? Imagine if instead of learning about the area of a rhombus, the stakes were much higher. If your financial future depended on your memory of your high school curriculum, save the formalities and declare immediate bankruptcy; it would…
Why Breadth Trumps Depth
Watching and talking about sports might not be the waste of time many believe it is. Does this mean you should paint your face before going to a hockey game like Puddy, Elaine’s on-again, off-again boyfriend from Seinfeld? Should you wait hours on the phone, wasting incalculable time for the opportunity to speak about some ridiculous, hypothetical…
The Most Powerful Force in the Universe
There is one correctly answered question that helps to distinguish the rich from the poor; the happy from the unhappy; and the healthy from the sickly. Those who possess the knowledge and, more importantly, know how to apply it, may live the life of their dreams. Those who lack this golden ticket may be forced…
Lies Investors Believe
About twenty percent of the public believes any insane, illogical idea a creative survey-maker may dream up. This is known as the “one-in–five rule.” Let’s look at some of the wild things our friends and neighbors might believe: The cause of the disappearance of Malaysia Airlines flight 370 was due to space aliens, time travelers,…
Don’t be a Meta-Ignorant, McKnowledged-Based Investor
“If you’re very stupid, how can you possibly realize that you’re very, very stupid? You’d have to be relatively intelligent to realize how stupid you are.” John Cleese, Actor Imagine a school where the students, who were on the verge of failing, believed they should be on the honor roll and were infinitely smarter…
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