Defining Risk Better
Let’s define risk. The wall street folks define risk using Harry Markowitz’s approach, calling it volatility. They throw a “statistically significant” number of performance observations on a chart and come up with a variance—meaning how wide of a range is there from...
Keys to success as a financial advisor
Keys to success as a financial advisor. It is extremely common that any one investor might have one stock that is greater than, say, 10% of their portfolio. This can be the company they worked for over decades. This could be something inherited from a relative that...
Concentrated Positions
Managing Concentrated Positions It is extremely common that any one investor might have one stock that is greater than, say, 10% of their portfolio. This can be the company they worked for over decades. This could be something inherited from a relative that has...
Fixed Income and the Retail Investor
Fixed Income and the Retail Investor! Bonds or fixed income really have two purposes for the US individual investor: income and stability. Some will disagree with me. They would say that you might want to own bonds for appreciation. However, In order to achieve...
Forget “Wall Street Strategists”—think yield curve.
Forget “Wall Street Strategists”—think yield curve. Forget “Wall Street Strategists”—think yield curve! There is a cottage industry in the business of forecasting markets. It is meant for entertainment, not for advice. It began with newsletters, then with radio shows,...
Intro to Private Equity as a diversifier
Private Investments are diversifiers There are just four investable asset classes for your serious money: stocks, bonds, cash and real estate. Everything else you have is either hair-splitting exercise or a derivative. What led to the explosion of the Private Equity...
Investing in America
Why limit your stock investments to the United States? At the risk of being incredibly biased toward investing in America, let’s talk about our economic advantages over every other economy in the world. In The Accidental Superpower, Peter Zeihan makes some important...
Monte Carlo analysis
Monte Carlo Analysis Betting with Monopoly Money You do the client a disservice if you show them a line chart of steady growth, or even some so-called “Monte Carlo Analysis” exercise with 1000 predictions—called the probability of success–because those approaches do...
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