“We’re all Smart”

“Temperament is more important than IQ. You need reasonable intelligence, but you absolutely have to have the right temperament. Otherwise, something will snap you.” – Warren Buffett There’s a great scene in the movie Zero Dark Thirty where all of the top CIA operatives hunting down Bin Laden get together to discuss their options once…

Do We Need a Recession for a Meaningful Correction in Stocks?

“The stock market has predicted nine out of the last five recessions.” – Paul Samuelson The worst historical periods for investment returns have tended to cluster around major economic events such as the Great Depression, the highly inflationary environment of the 1970s and more recently the Great Recession. Stocks are said to be forward looking…

Fighting the Last War

“The most instructive, indeed the only method of learning to bear with dignity the vicissitude of fortune, is to recall the catastrophe of others.” – Polybius One of my favorite expressions about the behavior of investors is that we are constantly fighting the last war. The representative heuristic causes us to overweight recent events when…

The Chase for Yield

“People become risk-seeking when all their options are bad.” – Daniel Kahneman According to a recent Blackrock report, 81% of the global bond universe currently yields below 4%. This means income-seeking investors in search of higher yields have been forced to go further out on the risk spectrum (the whole point of the Fed’s interest…

The Long Run Revisited

“It is better to be roughly right than precisely wrong.” – John Maynard Keynes Jeremy Siegel first released Stocks for the Long Run in 1994.  There are people that partially credit this book with some of the stock mania that took hold in the late-1990s. Siegel did call the bubble in tech stocks before the…

Perma-Arguments

“Never argue with stupid people.  They will drag you down to their level and then beat you with experience.” – Mark Twain No one knows what’s going to happen in the future, especially when it comes to the financial markets. That’s why there will always be topics up for debate. There are some people in…

The Style Box of the Future

“The bottom line is that since diversification is the only free lunch in investing, you might as well eat a lot of it.”   – Larry Swedroe I was recently asked if there’s any room in the financial advice industry for innovation at the product level. Specifically, what do I think will be the biggest changes…

Charlie Munger on Human Misjudgement

“We can’t change the world. The only thing we can change is ourselves, by trying to get a better understanding of our own messed-up wiring.” – Guy Spier In last week’s Intelligent Investor column for the Wall Street Journal, Jason Zweig discussed value investor Guy Spier’s journey to reinvent himself as both a thinker and…