There is a strange little corner of economics that almost nobody talks about at dinner parties, and for good reason. It involves dead Irish peasants, a Scottish statistician with an unfortunate mustache, and a curve on a graph that refuses to behave. It is called the Giffen good, and if you are a value investor, […]
Why Value Investors Should Study the Potato Famine Read More »
You have read the books. You have watched the interviews. You have nodded along to every piece of advice about staying calm when markets drop. You have told yourself, with great confidence, that you are a long term investor who does not panic. Then your portfolio drops 15% in a week and you become someone
The Anatomy of a Panic: What Your Brain Does at -15% Read More »
There is a famous line attributed to Baron Rothschild, an 18th century financier who made a fortune during the panic that followed the Battle of Waterloo. “Buy when there is blood in the streets,” he supposedly said, “even if the blood is your own.” It is one of the most quoted phrases in investing history.
Blood in the Streets, Ice in the Veins: A Guide to Cold Blooded Investing Read More »
There is an old saying on Wall Street that even a dead cat will bounce if it falls from high enough. The image is grotesque on purpose. It is supposed to make you uncomfortable, because the thing it describes should make you uncomfortable too. A dead cat bounce is when a stock or an entire
Dead Cat Bounces and Other Ways the Market Breaks Your Heart Read More »
There is a particular silence that falls over someone checking their portfolio after a bad week. It is not the silence of calm. It is the silence of a person doing math they do not want to do. Ten percent gone. Just like that. The number sits on the screen like a doctor who has
Congratulations, You Are Down 10%: Now the Real Investing Begins Read More »
There is a particular kind of confidence that only shows up when someone is losing. You will not find it in the early stages of a trade gone wrong, when the loss is small and the ego still intact. It arrives later, after the position has bled for weeks, after the chart has become something
The Gambler’s Fallacy: Why “It Can’t Go Lower” is a Famous Last Words Read More »
Everyone is a long term investor. Right up until they are not. This is one of the most reliable patterns in all of finance. Not a market pattern. A human pattern. You build a portfolio with a 20 year horizon. You read the books. You nod along to the compounding charts. You tell your friends
Why Your “Long-Term Horizon” Disappears the Moment the Red Starts in Investing Read More »
There is a chemical in your brain that wants you to go broke. It does not care about your retirement. It does not care about your risk tolerance or your carefully constructed portfolio. It was designed about 200,000 years ago to help you survive on the savanna, and it has not received a software update
The Oxytocin Trap: Why We Trust “Charismatic” Founders with Our Life Savings Read More »
There is a particular kind of confidence that comes from looking at a chart that only goes back one year. It feels like knowledge. It looks like research. But it is really just a very expensive form of nostalgia. Welcome to recency bias, the mental habit that convinces otherwise intelligent people that whatever just happened
Are You an Investor or Just a Historian of the Last 12 Months? Read More »
There is a phrase that floats around investing circles with the confidence of a man who has read exactly one book about Warren Buffett. “I am buying the dip.” People say it like a mantra. They say it in group chats, on social media, at dinner parties where nobody asked. They say it while their
Stop Lying to Yourself: You Are Not “Buying the Dip,” You Are Catching Knives Read More »