In Praise of Short Sellers

In November, 2013, Whitney Tilson, who runs a small hedge fund called Kase Capital Management, gave a presentation to a group of money managers. Tilson’s talk was about a flooring company called Lumber Liquidators. In the previous two years, its profits had more than doubled and its stock had risen sevenfold. But Tilson made a…

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There’s A Booming Market For Used Yoga Pants…..WTF?

Like many obsessive collectors, Suzanne Nobles spends countless hours online scouring for treasures. The 25-year-old Arizona-based blogger isn’t tracking down rare antiques or priceless baseball cards, though. No, she’s on the lookout for Lululemon. One recent score—a pair of gray and split-pea green running shorts—cost her $95. While they initially retailed for $54, the shorts…

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When Willpower Isn’t Enough

    One of the most compelling talks I saw at this year’s American Economics Association conference was by Katherine Milkman, an assistant professor at the Wharton School at Penn. She holds a joint Ph.D. in computer science and business, but her passion is behavioral economics — and, specifically, how its findings can be applied…

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Before I Go

A resident’s surgical skill is judged by his technique and his speed. You can’t be sloppy and you can’t be slow. From your first wound closure onward, spend too much time being precise and the scrub tech will announce, “Looks like we’ve got a plastic surgeon on our hands!” Or say: “I get your strategy…

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Herd Behavior in Financial Markets

Over the last twenty-five years, there has been a lot of interest in herd behavior in financial markets—that is, a trader’s decision to disregard her private information to follow the behavior of the crowd. A large theoretical literature has identified abstract mechanisms through which herding can arise, even in a world where people are fully rational. Until…

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Dow And Apple

Apparently, Apple has been added to that anachronistic oddball index the Dow. For fun I have looked at the relative performance of the two over one year, two years, five years and finally dating back to 1980.

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The Power Of Not Knowing

To make money in the markets, you have to think independently and be humble. You have to be an independent thinker because you can’t make money agreeing with the consensus view, which is already embedded in the price. Yet whenever you’re betting against the consensus, there’s a significant probability you’re going to be wrong so…

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The Man In The Van

HE HAS ALWAYS lived by his own code, no matter what anyone thinks: a three-sport star athlete in high school who spent weekends camping alone; a hippie who has never tried drugs; a major league pitcher whose first corporate relationship was with an environmental organization called 1% for the Planet. He is 21 and says he…

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I Couldn’t Possibly Cheat At Home – That Would Be Dishonest.

The inability of those employed by banks and other financial institutions to behave morally and ethically has over recent times has become interesting research fodder for those who look at human behaviour. One of the most interesting recent forays into the field of behavioural finance has come from The University of Zurich. Economists Michel Maréchal, Alain Cohn…

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Dealing With Negative People

In the current Mentor Program we have been having a discussion about dealing with negative people, this is my contribution. The issue of negative individuals is one that everyone in the course will have to face and in turn generate strategies on how to deal with. Change is disturbing for the person undergoing the change…

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