Compounding investing wisdom...
I was reminded this week of the importance of history by one of the best financial writers today. Jason Zweig writes the Intelligent Investor column at the Wall Street Journal where he consistently weaves history lessons into common sense investing advice.
This week, he published two transcripts from speeches he gave back in 1999 and 2001. Both speeches show why there’s a need to learn history and how you should use it. Continue Reading…
Two questions being asked right now about bonds is when will interest rates rise and how will it affect bond performance? Of course, these questions aren’t unique to today. Investors always ask about interest rates and the potential impact to bond returns.
There’s just one tiny problem. Nobody knows how far, how fast, or even when interest rates will move. Predicting the markets is fruitless in the short term.
That doesn’t mean you can’t come up with a realistic expectation for future bond returns. Continue Reading…
Howard Marks released a new memo (PDF) this week on risk. It’s a revised and updated version of a memo he wrote last year. Being that the topic is risk, it’s worth a read. I thought I’d highlight a piece of it.
One thing people are not good at managing, especially around investing, is risk. And that’s an understatement. People are generally terrible at it. Continue Reading…
I finally got around to reading Simple Wealth, Inevitable Wealth by Nick Murray after seeing it mentioned several times online. You might be able to find a used past edition on Amazon, but your best bet is to buy it new from Nick Murray’s site (the book deserves a much broader reach).
For non-finance folks, the book should be refreshing. Murray dispenses with the financial-ese and puts things into simple, common sense terms that anyone can understand and focuses on the timeless ideas that matter.
I dug through all my notes and picked out ten lessons from the book. Continue Reading…
I re-read Ben Graham’s The Interpretation of Financial Statements this week. It’s a manual on, you guessed it – how to read financial statements. Okay, it’s not a thriller, but it’s barely 100 pages long and you can finish in an afternoon between naps.
At the end of the book, he briefly covers the difference between stock prices and values. This was 1937. Graham was well ahead of his time: Continue Reading…
A big mistake investors make is expecting more than what’s possible in the time allowed. In other words, they expect too much or too little in too short a time. The internet boom was built on this. The housing bubble was too.
But this condition isn’t specific to bubbles. Rather, two bubbles in 10 years raised our expectation of asset bubbles. Now we’re constantly looking for bubbles.
Which gets me to my point. Continue Reading…