Presentation: The psychology of financial misjudgment
Human misjudgment and its financial costs
Human misjudgment and its financial costs
A society is a network of relationships, and in a healthy society those relationships consist of trust. Trust is an understanding of how another will behave in a given situation. It leads to smooth coordination of action, greater prosperity, and…
Part 1: Valuations like this have always lead to disaster. Ben Graham, the father of security analysis, said that the stock market is a voting machine in the short run but a weighing machine in the long run. That machine weighs sales,…
The 2015 global sell-off saw many equity markets fall over 20% and a crash in junk bonds. Developed and even European markets were priced to deliver double digit 12-year returns by the start of 2016, and investor sentiment was pessimistic.…
Summary: There's no free lunch. It is difficult to attract and retain investors to strategies that are uncorrelated with popular benchmarks. This "business risk" helps sustain the momentum premium, which is huge on a risk-adjusted basis. Furthermore, asset class level…
I have been giving this presentation explaining how we can tell, with a high degree of accuracy, what stock returns will be over the following 10-15 years from any point in time. In the short-term the market is a voting…
You don't want to buy US stocks right now. If you own them, be prepared for a deep downturn or long period of very low returns, or more likely both. To value an investment is to assess its likely returns over…
You're paying for loyalty - make sure you're getting it. If you're paying someone for advice and investment management, his only compensation should be what you pay him, the advisory fee. 0.75 to 1.5 percent per year is fair, depending on account size.…
Everyone loves stocks. Maybe because they were the first easily investable security. Maybe because betting on businesses satisfies our gambling instinct - everyone fancies himself a handicapper when it comes to things we can read about in the paper. You…
Rates are near all-time lows across the civilized world. Everyone has an opinion about what that means for stocks - some say rates must soon start marching back up to 1982 levels, thereby dragging down multiples. Others say that we…