From Great to Good

As I’ve said before, I think Cliff Asness is one of the most interesting characters in the investment management business because he has a great combination of intelligence and humor about the financial markets. So I was glad to hear he was going to be interviewed by Barry Ritholtz for the latest Bloomberg Masters of…

Long-Term Thinking as a Contrarian Approach

One of the most interesting pieces I’ve come across lately deals with an investment firm that’s been managing the pension plan for Tampa’s police and firefighters for over 40 years. There’s a soap opera brewing between the investment firm, Bowen, Hanes, and a consulting firm that doesn’t agree with the way they do things from…

The Most Impressive Behavior Gap in the Mutual Fund Industry

I spend a lot of my time writing about the common mistakes made by investors because I operate under the assumption that cutting down on unforced errors could drastically improve portfolio performance for the majority of investors. The behavior gap between reported fund returns and actual investor returns that results from poorly timed purchases and sales…

Observations From a Decade in the Investment Business

It was recently brought to my attention that it’s been ten years now since I started my first full-time job in the investment industry. More experienced investors might not think this is a very long time, but it feels like an eternity to me considering my current level of understanding compared to what I knew…

Why Should You Care What Anyone Else Does With Their Finances?

The New York Magazine profiled popular blogger Mr. Money Mustache, who is very well known for his frugal ways and the fact that his extremely high savings rate allowed him to retire at the tender age of 30. The piece went through his history and talked about others he has inspired to live a similar…

Risk Management Always Matters

Many of the most intelligent investment thinkers out there today are in agreement that future returns for U.S. stocks and bonds will be subpar. This has been pointed out by many for a number of years now, but eventually it will happen.

How Our Memories Shape Market Cycles

Mark Andreessen laid out some interesting theories on Twitter earlier this week about market cycles: Traders like to say that the market has no memory from day to day. But when stocks are only up roughly 53% of all trading days, any single market session is going to be very noisy. What really matters are longer-term…

Which Investment Generalizations Should You Treat as Fact?

People always say that investing is more of an art than a science. This is true because there’s always an exception to every rule. Caveats abound when dealing with such a small sample size in a complex adaptive system such as the financial markets. So instead of concrete truths, investors are forced to deal in…

The Problem With Intuitive Investing

“Hundreds of studies have shown that wherever we have sufficient information to build a model, it will perform better than most people.” – Daniel Kahneman Ray Dalio and Bill Ackman are arguably two of the greatest hedge fund managers in the business today. Last week they shared the stage at an investment conference to discuss…

10 Great Lines From ‘Where Are the Customers’ Yachts?’

Where Are the Customers’ Yachts by Fred Schwed was written almost 75 years ago. I only read this book for the first time a few months ago and it’s remarkable how well it still holds up after all these years. It’s probably the funniest investment book I’ve ever read (out of an admittedly small set…