In Seeking Wisdom: From Darwin to Munger, Peter Bevelin has an interesting take on the frequency of extreme events: Statistics shows that the frequency of some events and attributes are inversely proportional to their size. Big or small changes can happen but the bigger or more extreme they get, the less frequent they are. For example, there…

The investment industry can be a very backwards place in many respects. For instance, seeing the price of a product go on sale generally makes people happy and induces them to buy more of it. In the markets, when things go on sale from a market crash that’s when investors are the most scared and…

We’re roughly seven months into the year and people are already starting to talk about how certain investment styles don’t work anymore. In the financial world, people act like seven months is considered statistically significant because everyone assumes that short-term trends trump all. The proliferation of a wide variety of new ETFs and mutual funds…

A reader asks: Should Social Security income be considered as part of the bond portion of a retired person’s asset allocation, thus increasing the stock portion? I’ve seen a number of opinions, articles and blog posts over the years about this question. It seems people tend to take a hard line and either say yes it…

GMO’s Ben Inker had a new piece out this week, and sticking with the firm’s theme from the past few years, he’s doing his best to lower investor expectations:

In The Education of a Value Investor, Guy Spier talks a lot about one of his biggest influences in the investment business — Mohnish Pabrai, who is a very well-known value investor. I’m a huge fan of Pabrai because of his simple, common sense way of looking at the world.

“60% of the time, it works every time.” – Brian Fantana

I always find that it’s easier to use the process of elimination to figure out what works by first figuring out what doesn’t work in the hopes that all that remains is the good stuff. As Charlie Munger famously says, “Invert, always invert.” I have an entire section of my book devoted to negative knowledge…

Last month I opened things up to my email subscribers by asking for any suggestions for future writing topics that I’ve yet to cover here. By far the most popular and repeated question came from parents and grandparents who would like to know how to instill good financial habits into their children and grandchildren. It’s…

Some of my writing and ideas here and on other media outlets have been called into question lately by some well-known trend following investors. I’m all about casting a skeptical eye on your own ideas because I think it’s important to be willing to admit your limitations, so I’m all about having a healthy debate. Challenging…