Money and Finance
- A Quick Diversification Thought...
An old post worth reviewing: Warren Buffett on Diversification - 1966 I was reminded of Buffett's thoughts as I was once again thinking about optimal portfolio size for the "know something" investor. If you can consistently find ideas where...
- Howard Marks On The Balance Between Offense And Defense
From The Most Important Thing: A conscious balance must be struck between striving for return and limiting risk— between offense and defense. In fixed income, where I got my start as a portfolio manager, returns are limited and the manager’s greatest...
- Body And Brain - By Scott Adams
Link to blog post: Body and BrainThe common view of human behavior is that thinking causes doing. In recent years science has discovered this situation to be more of a bi-directional thing. For example, studies show that forcing a smile can lead...
- Learning To Look Down Before Looking Up - By Sanjay Bakshi (1997)
Thanks to Lincoln for passing this along. More of Professor Bakshi’s old articles and talks are available HERE. While evaluating any investment opportunity, conservative investors always look down before they look up. They ask, "what can go wrong with...
- Interview By Kanwal From Simply Investing
The following is an excerpt from the interview that I had with Kanwal. The full interview can be found at the Simply Investing website. I recently had the honour of interviewing the blogger behind the awesome blog Passive-Income-Pursuit! Passive...
Money and Finance
Howard Marks: Investing entails a lot that isn't within one's control...
From The Most Important Thing:
The choice between offense and defense investing should be based on how much the investor believes is within his or her control. In my view, investing entails a lot that isn't.
Professional tennis players can be quite sure that if they do A, B, C and D with their feet, body, arms and racquet, the ball will do E just about every time; there are relatively few random variables at work. But investing is full of bad bounces and unanticipated developments, and the dimensions of the court and the height of the net change all the time. The workings of economies and markets are highly imprecise and variable, and the thinking and behavior of the other players constantly alter the environment. Even if you do everything right, other investors can ignore your favorite stock; management can squander the company’s opportunities; government can change the rules; or nature can serve up a catastrophe.
So much is within the control of professional tennis players that they really should go for winners. And they’d better, since if they serve up easy balls, their opponents will hit winners of their own and take points. In contrast, investment results are only partly within the investors’ control, and investors can make good money—and outlast their opponents—without trying tough shots.
The bottom line is that even highly skilled investors can be guilty of mis-hits, and the overaggressive shot can easily lose them the match. Thus, defense—significant emphasis on keeping things from going wrong—is an important part of every great investor’s game.
- A Quick Diversification Thought...
An old post worth reviewing: Warren Buffett on Diversification - 1966 I was reminded of Buffett's thoughts as I was once again thinking about optimal portfolio size for the "know something" investor. If you can consistently find ideas where...
- Howard Marks On The Balance Between Offense And Defense
From The Most Important Thing: A conscious balance must be struck between striving for return and limiting risk— between offense and defense. In fixed income, where I got my start as a portfolio manager, returns are limited and the manager’s greatest...
- Body And Brain - By Scott Adams
Link to blog post: Body and BrainThe common view of human behavior is that thinking causes doing. In recent years science has discovered this situation to be more of a bi-directional thing. For example, studies show that forcing a smile can lead...
- Learning To Look Down Before Looking Up - By Sanjay Bakshi (1997)
Thanks to Lincoln for passing this along. More of Professor Bakshi’s old articles and talks are available HERE. While evaluating any investment opportunity, conservative investors always look down before they look up. They ask, "what can go wrong with...
- Interview By Kanwal From Simply Investing
The following is an excerpt from the interview that I had with Kanwal. The full interview can be found at the Simply Investing website. I recently had the honour of interviewing the blogger behind the awesome blog Passive-Income-Pursuit! Passive...