Thinking process over outcomes is one of those simple, yet difficult pieces of advice that is useful in many areas of your life. It’s difficult because we’re so obsessed keeping score and thinking in binary right or wrong terms. Since luck and randomness play such a large role in a complex world it’s more important…

“If you can get good at destroying your own wrong ideas, that is a great gift.” – Charlie Munger Last year Michael Mauboussin and Dan Callahan from Credit Suisse performed an experiment to test how accurate people are at estimating their own abilities. They set up a trivia quiz of 30 true or false questions,…

It seems that every investor these days considers themselves to be a contrarian, so much so that the term doesn’t carry as much weight as it once used to. I almost hate to even define myself as a contrarian anymore. I don’t think being a contrarian is as much about going against the crowd as…

Harvard professor Clayton Christensen famously laid out the theory of disruptive innovation in the mid-1990s. In basic terms, disruptive innovation occurs when a new company or idea shakes up an existing industry, product or market. It was fortuitous timing on his part as we’ve seen firms such as Amazon, Facebook, Airbnb, Uber and Google spring up…

Bloomberg’s resident ETF expert, Eric Balchunas, shared some interesting stats today on the habits of millennial investors. Their use of ETFs has exploded in recent years, up nearly 60% over the last year. Also, a greater percentage of millennials use ETFs than older generations: Millennials: 41% Gen X: 25% Baby Boomers: 17% While millennials seem…

The Harvard Management Corp., which oversees the management of the school’s endowment fund, recently lost yet another CEO. The list of ex-Harvard endowment CEOs is growing longer by the year: Harvard’s current interim chief marks the sixth person to lead the endowment since Jack Meyer left in the mid-2000s, good enough for an average tenure of just…

The old joke is that the stock market has predicted 9 out of the last 5 recessions. Finance pros also contend that the bond market is much smarter than the stock market. Case in point says the bond market elites is the shape of the yield curve. The indicator most industry observers pay close attention…

Until I read the book Shadow Divers: The True Story of Two Americans Who Risked Everything to Solve One of the Last Mysteries of World War II I didn’t really know much about scuba diving. Sure, I tried it once in Mexico, but that was maybe 25-30 feet of water. The book tells an amazing story…

From the peak of the tech bubble in early 2000 the returns on the stock market have been underwhelming. In fact, if you line up the peak of the market in 2000 with the peak of the market in 1929 just before the stock market collapsed, the returns aren’t that far off:     Although…

There was a crazy story on Bloomberg this morning about an obscure hedge fund that is supposedly putting up some of the best performance numbers in the industry. I say supposedly because the numbers almost have to be false. You couldn’t read this story and come up with any other takeaway. In many ways, the…