Dont Worry It Will Bounce

One of these things I have been hearing a lot lately during the current drawdown in equity prices is that you don’t want to sell because you will miss the inevitable bounce. Consider the chart of MSFT below – A close look tells you it took 16 years for MSFT to move beyond its 2000…

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The Halo Effect: Bad Forecasts by Billionaires

This week, the real estate mogul and billionaire Sam Zell said, “There is a high probability that we are looking at a recession in the next 12 months.” The culprit, he told “Bloomberg Go,” was the strong dollar and slowing global trade, the beginnings of layoffs at multinational companies and a general lack of demand. The bears of…

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Seven Varieties of Stupidity

“There are so many kinds of stupidity, and cleverness is one of the worst.” Thomas Mann. Many words have been expended on the nature of intelligence, while the topic of stupidity is comparatively neglected – even though it is all around us, screwing us up. That’s probably because we assume stupidity is just a lack…

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Why Negativity Dominates Your Daily Thoughts

We’ve all been there, mired in the throes of pessimism when life just doesn’t seem to be going our way. For the lucky ones, this entirely natural, though disconcerting, feeling ebbs and flows, ultimately dissolving into a more balanced, healthier state of mind. For hapless others, though, the extreme negative thoughts and ideation can overwhelm—even…

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What Is The Number One Mistake Traders Make

IG Markets community blog recently printed an article with the title What Is The Number One Mistake Traders Make? In this piece, the author looked at the impact of Prospect Theory on traders’ decision making and it repeats what I think is the mistake used when applying this to trading. At its core Prospect Theory…

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Noisy Decisions

Nobel memorial prize winner Daniel Kahneman is one of the world’s most famous psychologists, known particularly for his work identifying the role of cognitive bias in everyday decision making. In this edition of More or Less he talks to Tim Harford about his latest book, Noise – A Flaw in Human Judgement, in which he…

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A Century of Evidence on Trend-Following Investing

As an investment style, trend following has existed for a very long time. Some 200 years ago, the classical economist David Ricardo’s imperative to “cut short your losses” and “let your profits run on” suggests an attention to trends. Early in the last century, the legendary trader Jesse Livermore stated explicitly that the “big money…

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As Obvious As The Nose On Your Face

Following on from the previous post on the gain you will need to recover from the current fall out I thought I would rattle off charts of the worst performers and ask a simple question for those who are still holding these issues. My view is the market never lies to you it is totally…

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But The Market Always Goes Up

Along with the bleating of the crypto crowd that the current collapse is all a conspiracy – which tells you a lot about the psychology of people who take crypto seriously is the whinging of fundamental advisor types who are apparently telling their clients don’t worry the market always goes up. Apparently, they cannot differentiate…

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There is a fair bit of fresh air under current support. Intriguingly it is doing exactly the opposite of what an inflation hedge is supposed to do. I would be interested to know at what level forced liquidation of positions becomes an issue.

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How To Spot Luck

As everyone should know I am a great believer in luck playing an invisible hand in the success that many people enjoy. And there does come a time when you can spot luck deserting someone as the need for skill becomes apparent. The hedge fund Tiger Global has lost 66% of all investor gains accumulated…

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Armchair Commentary

Commentary on matters financial has always fascinated me because it reveals a great deal about those offering it. During the pandemic, we had people who at one stage were complaining that their 10 years old science homework was too hard also giving commentary on matters ranging from the intricacies of immunology to public health. Currently,…

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