What a difference five words make
Dawkins dates earth, says God created it…
Before I bashed the Efficient Markets Hypothesis again last week. I looked it up in what must surely be the ordinary investor’s efficient markets bible, Burton Malkiel’s A Random Walk Down Wall Street. The book is in its ninth edition, and my copy has ‘Over 1 Million Copies Sold’ [...]
Blame it on Bachelier
A random walk into recession
You’ve got to watch these two interviews with Benoit Mandelbrot:
part 1
part 2
Mandelbrot saw the financial crisis of 2007 coming, He couldn’t have told you exactly when or how it would happen. His achievement was simply in recognising that big, and sometimes destructive events do happen in financial markets.
Maybe [...]
Reward, without the risk
In theory:
The holy grail
Contrary to conventional notions of risk and reward, buying shares in safe companies really does improve returns. That’s the message from a research note published last year by Morgan Stanley.
It published an alluring chart, which depicts what goes on over a stockmarket cycle (click on it for a larger version):
The story [...]
Guarding against ego risk
In practice:
Up fell, down dale
I’ll start today’s blog more or less where I finished Monday’s appraisal of Anite, a profitable software company, with strong finances that is maybe, kind of, but not certainly, cheap.
Like most value investors I think much more about safety, than I do about returns, taking the view, contrary to conventional thinking, [...]
Bureaucracy gone mild
In finance, as in life, there are often severe consequences for making mistakes. The financial crisis has exposed those investors, most spectacularly the investment banks who borrowed too much but also private investors, who weren’t as disciplined as they should have been.
Financial blogger Gregory Speicher thinks investors can learn something about discipline from the medical [...]
Step forward… The real Thrifty 30
In practice:
I name this portfolio…
Regular readers will be familiar with my Thrifty 30 portfolios. They are portfolios of thirty shares in financially strong companies at cheap prices. I first tried it on this blog, then I had a go for Money Observer [pdf]. Up to now, though, I have not maintained a Thrifty 30 portfolio. [...]
The cheapest six stocks in August
In practice:
Six of the ‘best’
Here are the six cheapest stocks on the market. As Dr Keith Anderson, the inventor of the econometric method for divining them likes to say, they’re six of the best.
They’re not the best companies, they’re the six most unappreciated shares on the market. People may not like them for good [...]
Good companies at cheap prices
In practice
A random walk down Wall Street
How soon my ‘extended break’ ended. Now it feels like a mini-break and while I’m looking forward to resuming our discussions about the state of the market, and interesting companies, a bit of me is still in the middle of the Atlantic
All I got from Bermuda (apart [...]
Summer shutdown
In practice:
We’re all going…
I’m taking an extended break this summer and although I don’t usually make predictions, I confidently predict the next blog will be on Wednesday 26 August, one month from now.
In the meantime, and in time honoured tradition, here’s some summer reading.
I’m taking two books away:
Nassim Nicholas Taleb’s Fooled by Randomness. [...]
Thrifty 30 progress report
In practice:
Good companies at cheap prices
Occasionally on Twitter investors, as opposed to people hawking porn sites, show interest in my tweets. So, when henrio83 asked ‘What’s happened to your thrifty thirty?’ I thought I should explain.
First, a quick recap.
Thrifty 30 is the name I gave a method of discovering good companies at cheap prices. [...]
