Posts filed under “Philosophy”
Michael Mauboussin, chief investment strategist at Legg Mason Capital Management Inc., talks about his new book “The Success Equation: Untangling Skill and Luck in Business, Sports, and Investing.” Mauboussin talks with Tom Keene and Sara Eisen on Bloomberg Television’s “Surveillance.”
Viewers should pay close attention to his definition of certainty vs uncertainty and experience vs expertise:
Source: Bloomberg, Nov. 20 2012
One of the major philosophical takeaways from the past 15 years has been the failures of the Efficient Market Hypothesis and the rise of Behavioral Economics. Consider, as a corollary, the argument assumption that many pro Free Market folks make: Markets are much more effective, efficient and productive than government mandates or regulations. I do not…Read More
While I was working on my collection of lessons for my WaPo column this week, I ended up finding all manner of interesting, amusing but ultimately unusable items. Some of these were ironic and funny and snarly, but I did not want the column to be “The Schadenfreude Chronicles.” Rather, I wanted to find real lessons…Read More
I am always on the look out for lessons that I can apply to investing and business. This post-election morning is not any different. Let’s take a look at some of the more interesting aspects of the election season, and try to discern what lessons there are, for investors and others to learn: 1. Process…Read More
Bruce Bartlett goes off on some of the denialist behavior from the GOP. Bartlett writes: When a study doesn’t support their dogma, the GOP censors it: Nonpartisan Tax Report Withdrawn After G.O.P. Protest Original study still available here: Taxes and the Economy: An Economic Analysis of the Top Tax Rates Since 1945 (PDF) Bartlett discussed…Read More
Source: Bloomberg Brief The Sveriges Riksbank Prize in Economic (2012 Nobel Prize in Economic Sciences) was awarded to Alvin E. Roth and Lloyd S. Shapley today for their work on matching supply and demand for everything from single men and women to organ donors and their recipients. Americans have won 68% percent of all…Read More
We have our annual TBP Conference next week, and I wanted to take a moment to discuss what makes this event so different from most of the conferences you see advertised.
When you see events like this week’s Value Investor or the annual Ira Sohn Conference, the emphasis is on BUY THIS or SELL THAT. Its almost always a parade of manager’s and their supposed best ideas. I can give you 1000 war stories on this, but that is not how people make money in the markets. If it were, the audiences of financial TV programs would be filthy rich.
What makes much more sense is to have a series of experts with a demonstrated expertise in a given aspect of investing share their process with you. Whether its muni bonds, macro-economics, Europe, quantitative analytics, trading, technicals, behavioral economics, or even politics, hearing from the pros who have navigated treacherous waters is instructive.
We have a terrific event planned for next week — I am looking forward to meeting those of you who can make it. There are still a few discounted seats left courtesy of Bloomberg (go to this link).
The full schedule is after the jump
Every now and again, a meme pops up that cries out to have its head chopped off. The latest such idiocy: People leaving finance to find more “fulfilling” work. I noticed this over the past week when several such articles hit my inbox: The first I saw was a sincere discussion by Mathbabe explaining why…Read More
Over the years, I have debated Wharton (University of Pennsylvania) Professor Jeremy Siegel numerous times. He is a very nice fellow who wrote the widely read book Stocks for the Long Run (aka SFTLR).
If I were to take the other side of the SFTLR argument, I would focus on 3 things:
My main critiques are:
1) Buy & Hold delivers inferior returns. Even worse, most Humans have a hard time sticking to it.
2) A simple system of either Valuation — think Shiller’s 10 Year Cyclically adjusted P/E — or Tactical application of Moving Average — Mebane Faber’s 10 Month moving average — significantly improves returns by reducing equity exposure and volatility as markets crash or have major corrections;
3) The current Fed driven markets (indeed, from 1981-2011) is an aberration that STFLR does not (and indeed, can not) anticipate. To quote either Jan L. A. van de Snepscheut or Yogi Berra: “In theory, there is no difference between theory and practice. But, in practice, there is.”
Regardless of my views, I want to crowd-source the arguments pro and con for SFTLR — What does Siegel get right, what does he get wrong? What is the weakest and strongest parts of his viewpoints?