The Difference Between an Investment Firm and a Marketing Firm

I’m doing some research for a side project and came across an absolute gem from Jason Zweig that appeared in John Bogle’s book Common Sense on Mutual Funds. Here’s Zweig’s take on the difference between a marketing firm and an investment firm from an industry conference in 1997: Today, the question that you must decide…

Back-Testing The Tony Robbins All-Weather Portfolio

Tony Robbins has a new book out this week called MONEY Master the Game: 7 Simple Steps to Financial Freedom. The interviews that Robbins did with some of the greatest investors of all-time (Buffett, Dalio, Tudor-Jones, Ichan, Swensen, etc.) sound like they’re worth the price of admission alone. In a piece Robbins wrote for Yahoo Finance he…

Torturing Historical Market Data

Here are some other random thoughts on using historical market data when making investment decisions: There’s no such thing as right or wrong data, just better or worse. Stock market data looks spotless when you just see the performance numbers, but looks can be deceiving. There’s no way one can expect historical data to be all…

What Constitutes a Rich Life?

When I was in college, every spring a group of friends and I would go on a canoe trip on the Manistee River in the middle of nowhere in Northern Michigan. It was something of a last hurrah before school was out for the summer. During one of my final trips, after a long day…

Perception Matters

“I’ve heard Warren say a half dozen times, ‘It’s not greed that drives the world, but envy.’” – Charlie Munger This experiment is fascinating: That little guy was perfectly happy doing his job and getting rewarded with cucumbers right up until the guy next door got a grape. This is one of my favorite experiments because…

Stock Returns After Periods of Above Average Performance

Many investors have been operating under the assumption that we’re due for a market crash simply because stock returns have been so high over the past five years or so. The two large crashes we’ve experienced in this century alone have turned some forecasters into the financial prognosticator equivalent of Pavlov’s dogs.

The Value of I Don’t Know

“The way we traditionally conceive of ignorance—as an absence of knowledge—leads us to think of education as its natural antidote. But education can produce illusory confidence.” – David Dunning I have to imagine that having a behavioral bias named after your work is one of the highlights of the psychology profession (the Nobel prize isn’t…