Category: Investing

The Deep Reasons


Finding cause and effect in the stock market is a fool’s game. There are way to many variables and there are people in the equation too.  Individually, people are almost fully unpredictable.  Nonetheless finding tendencies with the crowd as background may be useful. As… Continue Reading “The Deep Reasons”

Is More Less?


Which is less risky?  All your eggs in one basket or a widely diversified collection of partly full baskets.  Unless you believe in an orderly, statistically justified world, the answer is unclear.   If you believe in that, then many baskets will likely work… Continue Reading “Is More Less?”

Do You Understand Investment Risk?


People don’t like risk.  More appropriately people do not like uncertainty.  Investment risk is about how volatile future outcomes may be, which, by any reasonable definition, is what uncertainty is about.  People are uncomfortable when the future is not specifically known, even though the… Continue Reading “Do You Understand Investment Risk?”

What Is Wrong With This Picture?


There are many ways to use information to make a misleading point.  Statistics are one but graphs are another.  Graphs are more insidious because our natural skepticism for numbers is not present. This graph came my way yesterday and it is interesting.  The message… Continue Reading “What Is Wrong With This Picture?”

What is the P/E Ratio For A Bond?


People talk a lot about the price/earnings ratio (P/E) of the stock market and how it is high now. Somewhere about 14 using forward earnings.  The confusion begins when we value alternative investments in different ways.  For example the yield on a 10-year bond. … Continue Reading “What is the P/E Ratio For A Bond?”

The Swiss Franc and US Dollar and Gold


I have always liked the Swiss Franc.  Even in high school I knew about the Swiss and their inherently future oriented and conservative society.  For many people now the Swiss economic standards are the ideal. It is interesting to go back 60 years or… Continue Reading “The Swiss Franc and US Dollar and Gold”

Bonds


Why will bonds fall in value as rates go up? A question from a man with 40 years in business and 20 years paying attention to investments. It was interesting to go through the process with him. First you need to notice that a… Continue Reading “Bonds”

Uncertainty Matters


People will not push their wealth into the future if they do not trust the future to behave in their favour or at least in ways they understand.  That business people do not have presently much faith in the future is a given.  The… Continue Reading “Uncertainty Matters”

But, What Does That Mean?


Forrest Gump is famous for the line, “Stupid is as stupid does.”  Money is the same.  “Money is what money does.”  The amount of money does not matter unless you use it. I suppose the way to look at it is that someone with… Continue Reading “But, What Does That Mean?”

Value Added Means Something


There is an easy way to make your life harder.  It is so easy that it can be done accidentally.  The way you do it is to take responsibility for, or to claim credit for, things that are not within your control. Chris Reynolds,… Continue Reading “Value Added Means Something”

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