January - March 2014 articles archive home
Which way next?
Assets are only worth the cash flows they can produce, artificially reducing the cost of financing these assets doesn't increase their value. So how do you protect yourself against the spin?
Monday, March 31, 2014 ... more
Future of work
Ten years ago, Facebook didn't exist. Ten years before that, we didn't have the Web. So you can be pretty sure that jobs won’t look the same a decade from now.
Friday, March 28, 2014 ... more
Bad news for slackers
"Successful people make many mistakes, and their success is due to hard work, not luck. They just try harder and more often than the average person." - William O'Neil
Thursday, March 27, 2014 ... more
“The belief…
…in the Greenspan-Bernanke-Yellen put gets greater each time there's a crisis,” Jeremy Grantham told Barron’s recently.
Wednesday, March 26, 2014 ... more
Averaging down…
…means buying more of a stock that’s sunk in price so as to bring down the average price.
Tuesday, March 25, 2014 ... more
Overvalued, so what?
Jeremy Grantham, Co-Founder and Chief Investment Strategist of Grantham, Mayo, Van Otterloo & Co. (GMO), recently shared his view on the valuations of U.S. stocks.
Monday, March 24, 2014 ... more
There is a particular vitality in anxiety, a sort of nervy power that one can’t say is fun, exactly, but is nonetheless slightly addictive.
Friday, March 21, 2014 ... more
Can't do
When your business is managing ‘other peoples’ money’, those ‘other people’ can have quite an influence on how you manage it.
Thursday, March 20, 2014 ... more
A big part of investing is knowing the difference between what you can control and what you can't.
Wednesday, March 19, 2014 ... more
I think...
… money managers often pick a style without much real conviction. Some investment management firms even hedge their bets by offering all styles.
Tuesday, March 18, 2014 ... more
That easy?
The goal of the non-professional should not be to pick winners - neither he nor his 'helpers' can do that - but should rather be to own a cross-section of businesses that in aggregate are bound to do well.
Monday, March 17, 2014 ... more
Science …
…is wretched in its treatment of the human body as a sort of complex mechanism made up of numerous little machines working automatically in a rather unsatisfactory relation to one another.
Friday, March 14, 2014 ... more
The inspiration …
… behind John Bogle’s decision to create the first index fund in 1976 came from an article written by Paul A Samuelson in The Journal of Portfolio Management in 1974.
Thursday, March 13, 2014 ... more
Process vs outcome
Wall Street thrives by appealing to our tendency to be outcome-focused. We rank fund managers, best asset classes, top-performing sectors, highest-returning mutual funds.
Wednesday, March 12, 2014 ... more
No one...
...who thinks themselves a thoughtful investor would welcome characterization as a mindless speculator, yet most react to earnings announcements like a TV audience to canned laughter.
Tuesday, March 11, 2014 ... more
Time to buy resources?
“It may be little early to go overboard in precious metals,” says Stephen Meintjies, “but the other commodities hold promise.”
Monday, March 10, 2014 ... more
Advice x7
1) Never trust a cop in a raincoat. 2) Beware of enthusiasm and love, both are temporary and quick to sway. 3) If asked if you care about the world's problems, look deep into the eyes of he who asks, he will never ask again.
Friday, March 7, 2014 ... more
Cost of dreaming
When everything you hear about the market is bullish, you may want to run in the other direction, suggests a paper published in Psychological Science.
Thursday, March 6, 2014 ... more
Extracts from the PwC post-budget event: “The NDP may not be everything to everybody but it does represent a vision.” - Ismail Momoniat
Wednesday, March 5, 2014 ... more
Moody farmer
From Warren Buffett in Berkshire Hathaway’s 2013 Report: It should be an enormous advantage for investors in stocks to have those wildly fluctuating valuations placed on their holdings – and for some investors, it is
Tuesday, March 4, 2014 ... more
Finding good news
It’s got nothing to do with cabinet differences or political differences or ideological differences. [All that’s needed] is the collective adoption of a mind-set which says let’s get on with things - Pravin Gordhan
Monday, March 3, 2014 ... more
Behavioural economist...
...Dan Ariely adds a fascinating twist to loss aversion in his book, Predictably Irrational.
Friday, February 28, 2014 ... more
How they started
I still remember the first time I ever heard of stocks, I was six. My parents went away on a trip, and a great-aunt stayed with me.
Thursday, February 27, 2014 ... more
What can we learn ...
… about the markets from spiders? Spiders set up their webs and then sit tight, waiting for the meal to show up. They are patient. They let their tools do the work.
Wednesday, February 26, 2014 ... more
From Bruce Berkowitz ...
… founder of Fairholme Capital Management: Almost by definition we are running toward that which most people are running away from. How else are you going to get a reasonable price on a good company?
Tuesday, February 25, 2014 ... more
The insurrection these mavericks created eventually caught on and has spread beyond the Bay Area. Under threat are the billions of dollars that mutual funds and brokers skim every year from often-unwary investors.
Monday, February 24, 2014 ... more
…do stocks have any value? When you get right down to it, what are they really?
Friday, February 21, 2014 ... more
Country competitiveness
In an interview last month on Value Investors Insights Michael Porter who is helping to lead a multi-year Harvard initiative on U.S. competitiveness was asked to highlight the key insights gained from that effort so far.
Thursday, February 20, 2014 ... more
Hard to beat
Irrational human traits like confidence, fear and greed make the markets much harder to predict.
Wednesday, February 19, 2014 ... more
It’s bizarre…
… in any other context, no one would dare suggest that a new subject is best mastered by not studying it directly.
Tuesday, February 18, 2014 ... more
Myths & poor advice
Fisher thinks the investment world is littered with myths and poor advice, and that “two-thirds of investment success lies in not doing the wrong thing, only one-third in doing the right thing.”
Monday, February 17, 2014 ... more
If a fellow ...
... would stop to think, he would understand that when money comes in so hard, it isn't reasonable to expect that it can go out and find more easy.
Friday, February 14, 2014 ... more
What’s in a name?
Adam Alter, assistant professor of marketing at New York University’s Stern School of Business says that what distinguishes the climbers from the fallers is whether their ticker symbols are pronounceable.
Thursday, February 13, 2014 ... more
The “wisdom of the crowds” …
… is a concept the efficient market hypothesis depends on by default – that prices are “accurate” because all relevant data is not only available, but also applied with collective wisdom.
Wednesday, February 12, 2014 ... more
One ...
... of the most amazing aspects of stock markets is how novice investors, who don’t really know what they’re doing, can succeed.
Tuesday, February 11, 2014 ... more
Extracts & data
Over 2013, as stock markets rose in the developed world, equities gradually became less attractive relative to bonds and cash.
Monday, February 10, 2014 ... more
Truth be told
Many years ago someone told me something that I flatly refused to accept. And I still don't accept it now, despite all the times I've seen it proved right. - Sergei Lukyanenko
Friday, February 7, 2014 ... more
Do investors in the U.S. stock market obtain their long term returns smoothly and steadily over time, or is their long term performance largely determined by the return of just a few outliers?
Thursday, February 6, 2014 ... more
There is ...
... a body of work, principally academic studies, that show that stocks outperform bonds, and value outperforms both growth and the popular stock market indices over long periods of time.
Wednesday, February 5, 2014 ... more
Bruce Berkowitz’s …
… investment checklist:

1. Can you kill the investment? Is there adult supervision at the company?
2. Is the company essential? Does it depend upon the kindness of strangers?
Tuesday, February 4, 2014 ... more
Your guess, as good as any
The selloff in emerging markets sent a cold chill around the globe last week, making January the worst month on Wall Street since May 2012.
Monday, February 3, 2014 ... more
Russell as teacher
Passive acceptance of the teacher's wisdom is easy for most boys and girls. It involves no effort of independent thought, and seems rational because the teacher knows more than his pupils
Friday, January 31, 2014 ... more
Michael Porter on investing - from an interview with John Hein, editor of Value Investor:
Thursday, January 30, 2014 ... more
9 types
From Financial Psychology Corporation, Kathleen Gurney’s nine investor types:
Wednesday, January 29, 2014 ... more
Wall Street …
… loves a good story. And when Wall Street spins a yarn, its emotional pitch drives sales.
Tuesday, January 28, 2014 ... more
Need to know
Looking at and perceiving the world may seem relatively simple, but may be the most complex step in the decision-making process.
Monday, January 27, 2014 ... more
For decades now …
… we have been witnessing a steady and sickening denigration of humanistic understanding and humanistic method.
Friday, January 24, 2014 ... more
Why they're irrational
An efficient and well-balanced market is composed primarily of three types of investment strategies — value investment, relative value investment, and speculation.
Thursday, January 23, 2014 ... more
Despite …
… the constant warnings that past performance is not an indication of future performance, past performance is exactly what most people in the money business use to entice their clients.
Wednesday, January 22, 2014 ... more
OK to be wrong
There is a complicating factor that makes the handling of investment mistakes more difficult. This is the ego in each of us.
Tuesday, January 21, 2014 ... more
Gold's lessons
Any asset class that loses almost 40% of its value in a relatively short time is worthy of further study, and in doing so Ritholtz provides some big lessons for investors.
Monday, January 20, 2014 ... more
See, in my world - the world of high-stakes gin and poker - we play for cold, hard cash. It's all business, pure and simple.
Friday, January 17, 2014 ... more
When once a man has fairly committed himself to speculation, his imagination soon grows to lend a hideous fascination to the objects of his pursuit.
Thursday, January 16, 2014 ... more
Once upon a time
The prevailing feeling says buy. The broker says buy. The pools say buy, for this rampant market is their harvest time in which they shuffle off their loads upon the new gangs of buyers.
Wednesday, January 15, 2014 ... more
3 reasons to sell
Because knowing when to sell a stock is difficult you may want to look for more than one or two warning signs before pulling out.
Tuesday, January 14, 2014 ... more
Nedbank's 2012 Stocking
One of the less constructive but more fun things to do at this time of year is to take a look at how some of last year’s predictions have turned out.
Monday, January 13, 2014 ... more
Dear Pierrepont …
… Yesterday your old college friend, Clarence, blew in from Monte Carlo, where he had been spending a few days in the interests of science, and presented your letter of introduction.
Friday, January 10, 2014 ... more
With the S&P and other major markets at near all-time highs there has been a lot of discussion about whether there is an inflating bubble about to burst. Financial bubbles do not occur every day, but they occur more often than one might think.
Thursday, January 9, 2014 ... more
Individual Advantage
Investing is an activity that essentially governs itself, regulated by the natural ebb and flow of investment values. The investor’s work is largely concerned with two things: an asset’s price and its underlying value.
Wednesday, January 8, 2014 ... more
From Walter
When it comes to investing, my suggestion is to first understand your strengths and weaknesses, and then devise a simple strategy so that you can sleep at night!
Tuesday, January 7, 2014 ... more
It’s that time of year again, when everyone’s trotting out their choice predictions for 2014. Not to be too different we went in search of the consensus view for the year. Then ...
Monday, January 6, 2014 ... more
Better not ... Friday, January 3, 2014
When investing ... Thursday, January 2, 2014
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