On The Dangers of Leverage and the Importance of the Investment Journey Photo: Pixabay I was recently at lunch with Jim O’Shaughnessy, the famed investor, Tweetstormer, and bestselling author of What Works on Wall Street, when he proposed the following investment question: Imagine you have a newspaper from 1 year into the future. On the…
Great Things Take Time
Why Focusing on the Long Term is More Important Than Ever Photo: GoogleMaps Look at the photo above. See that road in the center that cuts through the mountain ridge? The history behind that road is one of the most remarkable tales of human perseverance, yet you have probably never heard it. The story starts in…
Why Winners Keep Winning
Have you ever wondered why successful people continue to be successful? I address why those with early advantages are able to maintain them over time.
The Process Matters
Why All Value Investing is Not Created Equal Photo: Pixabay On the first day of ceramics class the teacher announced that the students would be split into two groups. One group would be graded on the quantity of the work they produced while the other group would be graded on the quality of the work they…
Be Careful What You Choose
How Your Preferences Evolve and Why It Matters Photo: Pixabay The experiment seemed simple enough. Each participant had to rank six paintings from their most favorite (1) to their least favorite (6). They were then told they could take home either the painting they ranked 3rd or the painting they ranked 4th. Naturally, most people choose…
In the Land of the Lost
On the Ever-Changing Landscape of Markets Photo: Wikimedia Commons It was 1913 and Theodore “Teddy” Roosevelt was embarking on a journey down the Rio da Duvida (River of Doubt). The river was one of the last uncharted places on the surface of the Earth and was arguably the most dangerous in all of the Amazon. However,…
The Echo Chamber
On Challenging Your Beliefs Photo: Pixabay Sam Walton created more wealth in the twentieth century than almost anyone else. His relentless spirit to compete while building WalMart is the reason why the Waltons are still the richest family in America with a combined net worth of over $150 billion. What I found most interesting about Walton’s…
The 6 Ways of Influence
On Recognizing and Preventing Financial Trickery Snake Oil (Photo: Wikimedia Commons) One of the best books I have ever read concerning human behavior is Influence: The Psychology of Persuasion by Robert Cialdini. In the opening chapter, Cialdini describes a peculiar trait about mother turkeys that has an interesting parallel to how humans behave: Turkey mothers…
Ask Yourself Why
On Knowing Your Values and Solving Problems Backwards Photo: Pixabay Why do you invest? Really think about it. My gut response used to be, “to replace my future income,” as I’ve discussed here. However, this response was incomplete. I say incomplete because it seemed too cold and mathematical. It was not based on my personal…
Lies, Damned Lies, and Stories
How Great Storytelling Can Blind Us From Reality Photo: Pixabay The computer graphics team at Lucasfilm was working around the clock to finish their two minute animated short, The Adventures of Andre and Wally B., before the annual SIGGRAPH computer graphics conference in Minneapolis. However, it was becoming clear that the team would not finish in…
