Managers
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Following Other Investment Managers?

Many Investment Managers (professionals included) generate ideas by closely tracking the holdings of well- known investment managers with above- average track records. There always seems to be a hot group of investors that others follow, although most aren’t followed for long. These are usually investors who have had recent success, so the media constantly reports […]

Cyclical stocks
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Cyclical stocks

Companies whose earnings tend to fluctuate sharply with their business cycles are issuers of cyclical stocks. When business conditions are good, a cyclical company’s profitability tends to be high and the price of its common stock tends to rise. When conditions deteriorate, the company’s sales and profits often fall sharply and/or rapidly. The timing of an […]

inefficiency
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Emerging Markets

The very inefficiency of the trading markets in many emerging markets (lack of liquidity, large bid – ask spreads, high transaction costs) makes a high – turnover, active management investment strategy inadvisable. Indexing has even worked well in markets such as China, where there have apparently been many past instances of market manipulation. Please follow and […]

Non-Linearity
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Non-Linearity

Humans are wired to think in a linear fashion. Most things in life work that way, but we often fail to see the potential for non-linear outcomes. Jamie Dimon touched on this topic in his recent annual letter … “I am a little perplexed when people are surprised by large market moves. Oftentimes, it takes only an unexpected supply/demand imbalance of […]

Evolution
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Politics, Economics, and Evolution

By Arnold Kling Some see the social world as just too complex to be successfully explained in terms of simple and general principles. Others, in a more radical way, state that human meanings or beliefs belong to a special domain of cultural things, which is forever closed to scientific explanation… the best way to counter […]

Mistake
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Investment Mistake

Investment Mistake #1: Don’t Place Excessive Trust in “Experts” Everybody has a conflict of interest with your wealth except you. Investment institutions manage your money so they can charge fees, and financial advisors sell you products so they can earn commissions. Similarly, the investment media seeks to maximize subscription and advertising revenue thus biasing editorial policy toward sizzle […]

Richard Feynman
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Investment Secrets of Richard Feynman

It is, of course, irritating that extra care in thinking is not all good but actually introduces extra error. But most good things have undesired “side effects,” and thinking is no exception. The best defense is that of the best physicists, who systematically criticize themselves to an extreme degree, using a mindset described by Nobel […]

cycles
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CYCLE POSITIONING

Cycle positioning is the process of deciding on the risk posture of your portfolio in response to your judgement regarding the principle cycles, and asset selection is the process of deciding which markets, market niche and specific securities or assets to overweight and underweight. There are the two main tools in portfolio management. It may […]

Humility and Curiosity
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Humility and Curiosity

Most important of all, we should be teaching our children humility and curiosity. Being humble, here, means being aware of how difficult your instincts can make it to get the facts right. It means being realistic about the extent of your knowledge. It means being happy to say “I don’t know.”. It also means, when […]

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