Investing is one domain where waiting quietly and doing nothing is often the best course. Why? Because most often the investment actions we take are mistakes. Behavioral psychologist Daniel Kahneman once cited a study showing that, “every action the individual investor takes has a negative expected return. On average, they lose, and the more ideas […]
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The 2-Minute Thought: A Contrarian Signal for Oil and Gas?
Imagine this: You are at a stock investment conference where dozens of companies bring their leadership to tell their story to potential investors. You, the investor, get to choose from several companies presenting at the same time. In one room, there is a very popular company, and the room is overflowing with analysts and portfolio […]
The 2-Minute Thought: The State of the Workday Lunch
If you were asked what your lunch break at work is like, you may well answer, “What lunch break?” Forget about the multi-course restaurant meal from decades past. Forget about the lunch hour between 12 and 1 — something The Washington Post calls “a charming relic of the past, like phone cords and typewriters.” Today […]
The Tail of Two Cities…
I was on the Board for many years of the Humane Society here in Burlington and one of the things in life you learn is, there are dog people and there are cat people and there are not that many who are both dog and cat people. Spoiler alert – I am a dog person. […]
How To Deal With The Ups and Downs…
Anne is writing about long term returns on page 4. I will deal with the shorter term here. It seems like every week there is a problem of overwhelming magnitude on Wall Street. If we don’t act on it, surely something dire is going to happen. But you know these overwhelming problems often are not […]
What It Takes To Be A Great Investor…
Investing is complicated. If you are a fundamental investor who looks at companies, you need to understand the company’s financials, grasp the underlying business, delve into how the company spends money to make money, and assess how it differs from its competitors. That work alone is substantial and hard. But it is not enough for […]
Taking the Long (and not so long) View…
The latest copy of the SBBI Yearbook just hit our desks. This annual publication, something of a bible for investment professionals, provides detail on more than eight decades of capital market returns. Much of what we have come to expect from stock, bonds and real estate – both their risk and return characteristics – is […]
The 2-Minute Thought: Like it today? Wait till tomorrow
We are unreliable inconsistent decision makers, according to an article from this month’s Harvard Business Review by Daniel Kahneman, Andrew M. Rosenfield, Linnea Gandhi, and Tom Blaser. We contradict the principles we believe in, we contradict our own prior judgments, and we often do so without realizing it. The authors note that when software developers […]
The 2-Minute Thought: How do we know if a new idea is ingenious or crazy?
When someone presents us with an idea that’s totally new and different, we may think, hey, that’s incredibly brilliant and game-changing. Or we may think, that’s the stupidest idea I’ve ever heard . . . it will never work. But how do we really know? After all, the telephone and Star Wars were initially rejected. […]
The 2-Minute Thought: Are Investors Scientists or Poets?
“Are you an artist or a scientist? An engineer or a poet?” So asks NYU finance professor and valuation specialist Aswath Damodaran in a recent blog. He goes on to lament that we live in a time when we must pick sides, even though it would be far more productive to bring both sides together. […]
The 2-Minute Thought: Trust Matters
Do you feel most people can be trusted? What informs how trusting you are? Are trust levels associated with education levels or religious beliefs? How do levels of interpersonal trust vary across countries and over time? And how do trust levels relate to GDP growth and income equality? These are some of the questions addressed […]
The 2-Minute Thought: The Paradox of Stocks Reaching All-Time Highs
The story of the week is that U.S. stock markets are at all-time highs even though no one is particularly in love with stocks. Since all three major U.S. markets reached record highs last week for the first time since 1999, there have been plenty of “partying like it’s 1999” stories (and more than one […]
