Fusion’s Felix Salmon got the dreaded pundit call-out this week for making a video telling people to sell their stocks in the after-math of the flash crash in 2010, as seen here:
The Shrinkage Effect in the Stock Market
There are a number of reasons cited for the fact that active fund managers have had a difficult time beating the markets over the years — higher costs, more trading activity, closet indexing, mis-timing the market, a shift to index funds and more highly-skilled investors, to name a few. Here’s another theory to add to…
How to Overcome Your Fear of Public Speaking
If you were to ask people what their biggest fear is, the list would usually include things like flying, spiders, heights, being confined in tight spaces, and even clowns. Yet one fear affects a majority of people more than anything else — public speaking. This is according to a number of different surveys that ask…
Experience or Expertise?
In the first episode of his new podcast, The Knowledge Project, Farnam Street’s Shane Parrish interviews Michael Mauboussin about a wide range of topics centered around the decision-making process. Mauboussin had some interesting things to say about the difference between experience and expertise: There is a great quote from Greg Northcraft, which I love, when…
A History of Bond Market Corrections
It’s been almost four years since the S&P 500 has had a 10% correction. That makes it the second longest such streak since World War II, trailing only the period from 1990 to 1997 that went longer without experiencing a double digit loss. Bonds, however, the investor’s go-to asset class for safety, have experienced two…
How Much International Diversification is Necessary?
A reader asks: Does it make sense to equal weight the Europe and Pacific ETFs as opposed to just buying the entire EAFE index fund? How has this strategy done historically? This is a great question because so many U.S. investors have a home bias within their portfolio and probably don’t spend enough time thinking…
Conflicting Finance Narratives
Learning about investing from some of the all-time great investors can be both enlightening and confusing all at the same time. Enlightening because it always pays to stand on the shoulders of giants, but confusing because even the greatest investors disagree on the best ways to be successful in the markets. An example from two…
Thoughts On Giving Financial Advice
One of the biggest reasons people run into financial troubles is because most hate talking about money or their financial blunders. It’s a taboo subject. But I’ve found that working in the investment industry makes it much easier for people to randomly talk to me about their finances. I like to compare it to those…
Are There Too Many Buffett Disciples?
Morningstar’s Jeffrey Ptak shared some very insightful tweets from Berkshire Hathaway’s annual meeting this weekend: It’s estimated that more than 40,000 people pack the CenturyLink arena in Omaha to hear what Buffett and Munger have to say at the Woodstock of Capitalism. Every year I read about more and more value investing groups and panels…
So You Want to be a Top Caller?
After the Dow Jones Industrial Average reached the meaningless psychologically significant 1,000 point level in 1966, the market began to falter. During this correction Warren Buffett began to hear from a handful of the investors in his partnership who warned him that the market could decline even further. Buffett said that these predictions brought up two…