Money and Finance
Link to: Optimism vs. Arithmetic
- Links
Peter Bernstein on risk (video) [H/T The Big Picture] (LINK) Related book: Against the Gods: The Remarkable Story of RiskSafal Niveshak: How to Be Happy and Get Rich (some lessons from a re-reading of Poor Charlie’s Almanack) (LINK) Nathaniel...
- Links
A large excerpt of the Boyles interview with Value Investor Confidential, minus the 3 stock ideas we discussed, on ValueWalk (LINK) Sanjay Bakshi: Reply to a Mail from a Friend on Valuation (LINK) A Dozen Things learned from Stanley Druckenmiller About...
- Investing And Speculation...
From Brandes on Value: Benjamin Graham addressed the differences between investing and speculation on the very first page of his book The Intelligent Investor: “An investment operation is one which, upon thorough analysis, promises safety of principal...
- Hussman Weekly Market Comment: Low And Expanding Risk Premiums Are The Root Of Abrupt Market Losses
Link to: Low and Expanding Risk Premiums are the Root of Abrupt Market Losses Through the recurrent bubbles and collapses of recent decades, I’ve often discussed what I call the Iron Law of Finance: Every long-term security is nothing more than a claim...
- Hussman Weekly Market Comment: Margins, Multiples, And The Iron Law Of Valuation
Link to: Margins, Multiples, and the Iron Law of ValuationThe equity market remains valued at nearly double its historical norms on reliable measures of valuation (though numerous unreliablealternatives can be sought if one seeks comfort rather than reliability)....
Money and Finance
Hussman Weekly Market Comment: Optimism vs. Arithmetic
Link to: Optimism vs. Arithmetic
Current market conditions provide an ideal moment to highlight the distinction between investment and speculation. Sound investment is a) the purchase of an expected stream of future cash flows that will be delivered to the investor over time, where b) the price paid today will result in an acceptable long-term return if those expected cash flows are delivered, and c) the expectations are set using assumptions that allow a reasonable margin of safety. As Benjamin Graham observed long ago, “Operations for profit should not be based on optimism but on arithmetic.”Speculation, by contrast, is the purchase of a security in the expectation that its price will increase. Speculation relies much less on calculation than on psychology, particularly of two forms: a) expected changes in sponsorship, and b) expected changes in risk aversion.
- Links
Peter Bernstein on risk (video) [H/T The Big Picture] (LINK) Related book: Against the Gods: The Remarkable Story of RiskSafal Niveshak: How to Be Happy and Get Rich (some lessons from a re-reading of Poor Charlie’s Almanack) (LINK) Nathaniel...
- Links
A large excerpt of the Boyles interview with Value Investor Confidential, minus the 3 stock ideas we discussed, on ValueWalk (LINK) Sanjay Bakshi: Reply to a Mail from a Friend on Valuation (LINK) A Dozen Things learned from Stanley Druckenmiller About...
- Investing And Speculation...
From Brandes on Value: Benjamin Graham addressed the differences between investing and speculation on the very first page of his book The Intelligent Investor: “An investment operation is one which, upon thorough analysis, promises safety of principal...
- Hussman Weekly Market Comment: Low And Expanding Risk Premiums Are The Root Of Abrupt Market Losses
Link to: Low and Expanding Risk Premiums are the Root of Abrupt Market Losses Through the recurrent bubbles and collapses of recent decades, I’ve often discussed what I call the Iron Law of Finance: Every long-term security is nothing more than a claim...
- Hussman Weekly Market Comment: Margins, Multiples, And The Iron Law Of Valuation
Link to: Margins, Multiples, and the Iron Law of ValuationThe equity market remains valued at nearly double its historical norms on reliable measures of valuation (though numerous unreliablealternatives can be sought if one seeks comfort rather than reliability)....