Investor Levels by Ability and Results
Most investors lag the market or lose money. A very small percentage are big winners in the long term, building real wealth
Probability-based Investing
Probability based investing is a framework to making better decisions. It works better as you gain experience in evaluating businesses.
Do you plant Strawberries or Cherries?
Mental images can keep us on the right track. Sharing one from a farm trip.
Expectation Mismatch: Key to Outsized Gains
Outsized gains are made at specific times in the stock market. Expectation mismatch is a key factor that comes into play. Along with patience.
Stock Valuation: Theory vs Practice
All the top B-Schools teach rigorous methods to value a company. This article discusses the practical effectiveness of these methods and how often are they used by real investors.
Luck vs Skill in Investing
Don’t be fooled by social media claims of massive returns in a day/month. In the short term, anyone can get lucky. It is only in repeated investments over the long term, that skill shines through. And less than 2% investors beat averages over a 10 year period, which tells you what % of “investors” try to ride their luck, and fail.
Would you bet on a one-horse race
Hear a famed investor’s father’s story of the gambler who one day hears about a race with only one horse in it…
“Dumb Money and the Baffling Allure of Bad Investment Advice”
Retail investors are smart people who unfortunately behave in dumb, self-destructive ways. Their actions reflect overconfidence, financial ignorance and a wealth-reducing love of gambling
Options Trading: Weapon of Mass Destruction
Options Trading is Gambling. Unless you are a corporation or a highly trained professional trading options for hedging, there is no scenario in which money is made consistently with options.
Apple $AAPL in 2013: Rare Perfection
When share performance diverges from the business. Rarely does an opportunity come around to buy a fabulous business like Apple at a deep discount. One such event happened in 2013. We cashed in big time.
SuperInvestors
B-schools and Passive funds say the market is perfectly efficient. Don’t believe the ivory tower folks or those pushing their own agenda.
Here are examples of active investing beating the market regularly, from the Master - Warren Buffett - himself.