The Destruction Of Wealth
Every generation bears witness to the destruction of wealth – all booms end in a bust that is the natural cycle of the markets. These busts always follow on the heels of what has become known as irrational exuberance and this exuberance is fueled by hubris. But as each investing generation learns price goeth before…
Averaging Down Is Friggen Stupid
One of the eternal truths about trading is that it is conducted by humans and humans are flawed. This is simply the nature of the universe. However, what this means is that all humans irrespective of culture, background, or education are prone to making the same errors. There is a great myth in markets that…
Change The World – Perhaps Not
RobinHood (HOOD) was supposed to redo the way people “did” trading by removing what was considered the old stuffy Wall Street way of doing things by effectively gamifying trading. Perhaps not today. What the likes of HOOD, PTON, and ZM demonstrate is that the one constant in markets is that history repeats. Irrational exuberance is…
Perception Versus Reality
Coincidence is a wonderfully odd thing. Whilst filling the truck at the local petrol station this morning a car pulled up at the bowser next to me – there is nothing earth-shatteringly exciting about this other than the interesting fact that it had three reasonably new parking tickets on under one of its windscreen wipers.…
Early Candidate For Ugliest Chart of 2022
If ever you find yourself in awe of hedge funds there are two things I recommend you do. Firstly read The Hedge Fund Mirage by Simon Lack Secondly, refer back to this chart.
Human Memory: How We Make, Remember, And Forget Memories
From the moment we are born, our brains are bombarded by an immense amount of information about ourselves and the world around us. So, how do we hold on to everything we’ve learned and experienced? Memories. More here – National Geographic
Most Important Chart Of 2022
Baring some other catastrophe the current uptick in interest rates in the US (and eventually here) will be the most important “economic “event” of the year with ramifications not so much for equities but definitely for real estate. Interest rates have been in a long-term drift downwards for three decades as shown in the chart…
Milk Futures
It’s not just the more widely traded “food” related commodities that have been on a tear. I have always regarded milk as a legacy contract leftover from days gone by but it has done extremely well over the past year.
Funny If True….
PS: I have a very vague recollection of a trader in the 1980’s being caught in a similar manner with copper.
Its A Bet Not A Prediction
One of the issues I have with technical analysis and its more die hard adherents is that they assume they are making a prediction when in fact they are making a bet. This might seem to be a mild quibble of a simple matter of definitions but the two words carry much different meanings both…
How Not To Measure Markets
Social media….the gift that just keeps on giving in terms of the idiocy it offers up to traders. It is hard to decide whether it is a wonderful entertainment value or whether it is profoundly depressing in terms of the idiocy that it generates. The latest piece of inanity comes from the notion of how…
What Are Your Investment Beliefs?
I am sure I have bored plenty of people in recent years by repeating the mantra ‘process over outcomes’. There is probably no more important frame or model to apply when considering how we make investment decisions. In an environment where skill is often overwhelmed by luck and randomness the more we focus on results…
How to Stop Procrastinating
Confession: I’ve spent most of my life as a chronic procrastinator. I’ve also spent most of my life justifying that chronic procrastination. “It’s just how I work,” I’d say to myself after yet another stress-inducing last-minute sprint to complete a project. The pressure of an imminent deadline was what I needed to thrive. Scientifically, I…
