Investing, Basically

“Perceptions of future stress are felt now.” – Richard Peterson From Richard Peterson’s Inside The Investor’s Brain: Researchers examined the stress responses of two groups of rats after they were subjected to painful electric shocks. Group 1 received painful electric shocks 10 times per hour, while group 2 was shocked 50 times per hour. The…

A Portfolio Premortem

“The only guarantee, ever, is that things will go wrong. The only thing we can use to mitigate this is anticipation.” – Ryan Holiday In the book Obstacle is the Way author Ryan Holiday describes the benefits of the performing a premortem (emphasis mine): In a postmortem, doctors convene to examine the causes of a patient’s…

Book Review: Pragmatic Capitalism

One of the many reasons investors have been so whipsawed by the markets since 2007 is a lack of understanding about the dynamics at work between the financial markets and the economy.

Why (Almost) Everyone Needs a Credit Card

“Credit cards are the crack cocaine of the financial world. They start out as a no-fee way to get instant gratification, but the next thing you know you’re freebasing shoes at Nordstrom.” – Scott Adams One of the first rules of personal finance is to stay out of credit card debt. The average interest rate…

Charles Ellis on Values Discovery

“The “winner’s game” of rigorous, individualized values discovery and counseling may not be as financially rewarding to investment managers as the performance “product” business based on price discovery, but as a profession, it would be far more fulfilling.” – Charles Ellis Charles Ellis, author of the classic book investment book Winning the Loser’s Game, came…

In Search of the Perfect Portfolio

“There is no such thing as a perfect portfolio. We’ll only know what was perfect in retrospect. There is, however, a portfolio strategy that will meet your needs. It’s conceived from your financial situation, your understanding of risk, your time horizon and your desires.” – Rick Ferri MarketWatch columnist Brett Arends has been looking for…

Why Willpower Alone Isn’t Enough to Change Your Behavior

“You have to build systems to protect against your lesser self.” – Tim Ferriss I’m a big fan of the new Tim Ferriss podcast. He interviews successful people from a wide range of backgrounds and shares interesting productivity and process improvements. His latest with author Neil Strauss is the best one I’ve listened to yet….