“If you have trouble imagining a 20% loss in the stock market, you shouldn’t be in stocks.” – John Bogle

“The nature of human psychology is such that you’ll torture reality so that it fits your models, or at least you’ll think it does. To the man with only a hammer, every problem looks like a nail.” – Charlie Munger A few months ago I wrote a post about the S&P 500 sector quilt which…

“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…

“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…

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.

“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…

“Wall Street has a few prudent principles; the trouble is that they are always forgotten when they are most needed.” – Benjamin Graham

“But I like to ponder. And pondering things, just sort of thinking about it and thinking about it, turns out to be a pretty good approach.” – Jim Simons

“What goes up comes down, and what goes down comes back up.” – Mark Mobius

“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…