Category: Asymmetric Risk Reward
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What would Warren Buffett do?
Few investors have gotten as much media attention than Warren Buffett. He is considered to be the most famous investor in the world. Buffett is the chairman, CEO and largest shareholder of Berkshire Hathaway (BRK.A) and is consistently ranked among… Read More
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The Stock Market Trend: What’s in Your Boat?
The stock market trend as measured by the S&P 500 stock index (the black line) has had a difficult time making any gains in 2015. SPY in the chart below is the SPDR S&P 500 ETF seeks… Read More
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The Starting Point Matters
For long term investors who buy and hold, the risk/reward expectations are sometimes very, very, simple. If you bought the long term U.S. Treasury index via the iShares 20+ Year Treasury Bond ETF (Symbol: TLT)… Read More
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Actively Managing Investment Risk
The global market declines in early August offered a fine example of the kind of conditions that cause me to exit my long positions and end up in cash. For me, this is a normal part… Read More
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Gold Isn’t Always A Hedge or Safe Haven: Gold Stock Trends Have Been Even Worse
For several years we often heard investors suggesting to “buy gold”. We could throw in Silver here, too. They provide many theories about how gold bullion or gold stocks are a “safe haven”. I’ve written about the… Read More
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Bonds Aren’t Providing a Crutch for Stock Market Losses
In Allocation to Stocks and Bonds is Unlikely to Give us What We Want and What You Need to Know About Long Term Bond Trends I suggested that bonds may not provide a crutch in the next bear market. It seems… Read More
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Using the Month of September to Understand Probability and Expectation
September is the month when the U.S. stock market’s three most popular indexes usually perform the poorest. So say the headlines every September. I first wrote this in September 2013 after many commentators had published information about… Read More
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Why Index ETFs Over Individual Stocks?
A fellow portfolio manager I know was telling me about a sharp price drop in one of his positions that was enough to wipe out the 40% gain he had in the stock. Of course, he had… Read More
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What You Need to Know About Long Term Bond Trends
There is a lot of talk about interest rates and bonds these days – for good reason. You see, interest rates have been in a downtrend for decades (as you’ll see later). When interest rates… Read More
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Allocation to Stocks and Bonds is Unlikely to Give us What We Want
That was the lesson you learned the last time stocks became overvalued and the stock market entered into a bear market. I believe holding and re-balancing markets doesn’t give us the risk-adjusted returns we want.… Read More