Why Understanding Causality is So Difficult Photo: Pixabay It’s Sunday morning. You walk to your mailbox and see a letter from a mysterious stock research firm. The firm claims that their market insights team knows with 100% certainty that a particular stock is going up over the next week. Skeptical, you put the envelope aside…
You Have No Competition
On Your Career Development and How to Think About Competitors Photo: Pixabay I will never forget the moment when I changed how I think about competition. I was watching Barry Ritholtz interview Ken Fisher, the founder and chairman of Fisher Investments, at the opening keynote for the 2018 Evidence-Based Investing Conference (EBI West) in Dana…
A Change in Perspective
Re-Thinking How To Make Investment Decisions Photo: Pixabay The author John Valliant once said that there is only one certainty when it comes to following tiger tracks: If you follow them long enough you will eventually arrive at a tiger, unless the tiger arrives at you first. This was the reality for Yuri Trush and…
What is Your Financial Tipping Point?
On Understanding Your Financial Limits Photo: Pixabay It was 1949 and Fred Charles Iklé wanted to know why some European cities had been abandoned during World War II while others survived. While traveling through war-torn Germany, Iklé discovered that the city of Hamburg was still inhabited despite losing 3.3% of its population and half of…
Why The Best Predictor of Future Stock Market Returns is Useless
On the Importance of Supply and Demand Photo: Pixabay In one of my favorite animal experiments, researchers wanted to see how pond cichlids would change their mating behavior as the sex ratio (number of males relative to females) was altered in a controlled environment. Since cichlids are known for their monogamy and don’t desert their…
Exception To The Rule
On The Pitfalls of Exception-Based Investing Photo: Flickr He described the sensation as “a thousand knives” being driven into his body. He knew cold, but not like this. Charles Herbert Lightoller was treading 28 degree water (-2 Celsius) as he watched the Titanic slowly sink into the ocean. Though he managed to climb aboard an…
Why You Don’t Know the Price Until You Sell
On Abnormal Markets and How to Prevent Forced Selling Photo: Pixabay It was 1935 and the Austrian physicist Erwin Schrödinger had a problem with Albert Einstein. Einstein had just released a paper with two fellow scientists that discussed the concept of superposition, an idea that seemed somewhat absurd to Schrödinger. Superposition implied that an atom (or…
One Decade Later
A Different Perspective on the Global Financial Crisis Photo: Pixabay When Lehman Brothers filed for bankruptcy I was in the back of my aunt’s Honda Odyssey headed north to start my first week at Stanford. Of course, I didn’t know about Lehman at the time and I also didn’t know much about banking or investing…
Nothing Into Something
Why Your Time Horizon Isn’t Long Enough Photo: Pixabay No one knows exactly how Sam Zemurray came across his first banana in 1893, but he knew it was special. In fact, Sam became so obsessed with the yellow fruit that he traveled to Mobile, Alabama two years later in hopes of entering the banana trade. Unfortunately,…
An Investment To Die For
On Reverse Life Insurance and Regulating Controversial Markets Photo: Still Life With A Skull, Philippe de Champaigne (Wikimedia Commons) Imagine you are 25 years old and you have just been diagnosed with a terminal illness. Your physician says that you have 6-12 months to live. The shock begins to set in as you start to…
