In Praise of Incrementalism & Slight Edges

Dr. Atul Gawande recently shared a story in The New Yorker about a man named Bill who started to experience severe migraines at age 19. The headaches eventually became almost a daily occurrence that would cause extreme pain, make him throw up and generally make life so miserable that he had to quit his job…

How to Read Financial News Headlines

Robert Martorana wrote a good piece at the Enterprising Investor for the CFA Institute on how to read the news from the perspective of a portfolio manager. This was really good: Rather than reading less, portfolio managers must learn to rapidly detect what is nonsense and move on. It’s a necessary skill when confronted with…

Amazon is Eating the Retail World

I think over the holidays my house set a new world record for most consecutive days of Amazon deliveries in a row. I buy everything from Amazon — clothes, shoes, books, technology, cleaning supplies, furniture, household goods, food, drinks and pretty much anything else you can think of. For many of these goods, I save money…

One of My Investing Pet Peeves

“The essence of risk management lies in maximizing the areas where we have some control over the outcome while minimizing the areas where we have absolutely no control over the outcome and the linkage between effect and cause is hidden from us.” – Peter Bernstein When you spend enough time in the finance industry you’re…

How Much Should You Sell Your Home For?

My wife and I went under contract on a new home this past week. It’s all very exciting but also kind of a stressful situation. The new home won’t be finished until spring so we have a few months to plot our course of action on how to sell our current home in the meantime….

Great to See You Active Management – Are You Still Alive?

In the summer of 2007, the markets experienced a huge dislocation that was something of a precursor to the financial crisis. Many of the largest, well-known quant hedge funds all started blowing up at the same time. Everything they were buying was going down while everything they were shorting was going up, causing massive losses…

10 Things You Can’t Learn From a Backtest

We’re currently living in the golden age of the backtest. Things have never been better for quantitatively-inclined investors. There are algorithms on top of algorithms. We’ve never had so much historical market or corporate data available at the click of a button. Computing power is off the charts. Entry-level analysts can now perform calculations with…

How Market Crashes Happen

Charlie Munger has long championed the benefits of acquiring worldly wisdom through the development of mental models which utilize a number of different subjects — physics, biology, sociology, psychology, finance, philosophy, literature, etc. — to understand the world and make better decisions. As far as I’m concerned, Michael Mauboussin is Munger’s heir apparent in this…

The Two Types of Knowledge in the World

  The past few years have been rough on movie lovers like me. The majority of new releases are unoriginal and follow a worn out script. Hollywood’s formula is to remake old movies or simply come out with as many sequels as possible to try and replicate past successes. Take a look at the number…

How To Sell Finance Books Like Harry Dent

In early-2009, as it seemed like the financial world was teetering on the edge of collapse, I was asked by a family member what I thought about a new book by Harry Dent called The Great Depression Ahead: How to Prosper in the Crash Following the Greatest Boom in History.  My response to this inquiry was…