Sometimes it feels like the stock market is mocking us -- intentionally doing the unexpected. When we invest new money, the stock market promptly falls as if it's punishing us. Other times, it jumps up after we had sold some shares. If you are an investor, you will encounter this … [Read more...] about Why does the stock market mock us?
How I approach investing
It was some time in 2011 if I remember correctly. I had tuned to my local NPR station at lunch time. A financial advisor couple was getting interviewed. They had just released a new book on financial planning. It was a pleasant discussion. They seemed genuine. They also appeared … [Read more...] about Don’t take investing advice from people you don’t know!
In July 1999, Warren Buffett gave a speech to business leaders in Sun Valley, Idaho. Back then, the U.S. stock market had been on a tear. Understandably, many attendees were very optimistic about their businesses’ prospects. Undaunted though, Buffett went on to make the argument … [Read more...] about When do I exit stock positions?
As I have written multiple times in prior posts, our gut instincts, friends’ views, media reports, and most expert opinions are really not that useful when it comes to investing. We, investors, consistently underperform even the ordinary index funds by as much as one-third due to … [Read more...] about Be mechanical about your investing approach
Elon Musk, Tesla’s CEO, said last month that economic moats are lame: “If your only defense against invading armies is a moat, you will not last long. What matters is the pace of innovation. That is the fundamental determinant of competitiveness.” A few days later, I was in … [Read more...] about Are moats really lame?
If you were following business news in 2010, you must have come across one or two headlines bemoaning America’s “lost decade”. Between 2009 and 2012, there were many discussions in the business media and many columns were written in the press on this subject. How investors have … [Read more...] about Revisiting the lost decade of U.S. stocks
Some investors are fascinated with dividend paying stocks. They invest in them exclusively. Often times, these investors are looking to generate income. Some investors also believe that dividend paying stocks are safer to invest in. There are investment services and portfolio … [Read more...] about Rise above dividends!
Why do I say that? Because people often think of the stock market as a roller coaster. It goes up for a while, but then goes down, eventually ending up at the same place where it began, and then the cycle starts over. The implication is that one must catch the up-cycle to make … [Read more...] about Stock investing is not a zero-sum game
Why everyone and their grandmother don’t get rich investing in the stock market? It sounds straightforward enough to invest. All one has to do is buy an appropriate market index fund (or ETF) and hold it for ten or twenty years (the well-known buy-and-hold strategy). If you … [Read more...] about Don’t fall for steady returns
Warren Buffett’s shareholder letter came out last weekend. It’s an annual ritual and it makes for great weekend reading. I am a long-time shareholder and I appreciate how he comments on the general state of investing – besides his own company, Berkshire Hathaway’s affairs. As … [Read more...] about A lesson from Buffett