Whether we like it or not, we investors are always making bets. We invest our capital with the expectation that down the road we will be able to recover all of it plus some. But since the future is unknowable, we implicitly make a bet every time we invest. Specifically, … [Read more...] about The odds of making money in stocks
This stock market crash is looking more like a short-but-deep correction than a conventional bear market. Since its March 23rd trough, the market has been relentlessly going uphill. As of today, the S&P 500 is just about 12% off from its prior peak level. Not that I am … [Read more...] about Are we in a short correction?
In his 2010 shareholder letter, Warren Buffett wrote that his elephant gun had been reloaded, and his trigger finger was itchy. He was referring to Berkshire’s dry powder cash that was intended for major acquisitions. Extending the same metaphor, today I could say that my BB gun … [Read more...] about My gun is reloaded
I came across an interview that CNN’s Poppy Harlow did with Warren Buffett in September 2018. She said investors were worried about cracks showing in the U.S. economy after a long nine-year run. And then she asked if Buffett was worried about an imminent recession (4:50). To … [Read more...] about A very short bear market?
People fear double-digit stock market declines. I see them as opportunities. The US stock market has been more volatile lately. And my portfolio is better off because of this volatility. I just finished reading Nassim Taleb’s book Antifragile. He has got me thinking about my … [Read more...] about Volatility is good for my investments
Last year in November I wrote a blog post (Why I Stay Invested in Stocks?) about some investors (they were my friends) who were convinced that a market crash was imminent, and they were waiting on sidelines with cash to invest. Well, this is nearly the end of 2018 and that crash … [Read more...] about Why that market crash didn’t happen?
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?
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
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
… but only in the short run. As we saw in this previous post, stocks go down 10% or more every year. More often than not, they also recover quickly. So what return could we expect in a given year? Here is a good chart from J.P. Morgan. It shows the range of annual returns that … [Read more...] about Yes stocks are volatile