Editors Pick - intellectualfinance.com

The 90% Rule: Why BDCs are Legally Obligated to Make You Rich

Business Development Company, Asset Allocation, Editors Pick, Investing

There’s something wonderfully absurd about a law that forces companies to hand over their profits. It’s like mandating generosity, which sounds about as effective as legislating happiness or requiring spontaneity. Yet this is precisely what happens with Business Development Companies, and the mechanism behind it reveals something fascinating about how we’ve tried to engineer prosperity […]

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The Incubation Trick- How Fund Houses Secretly Create 10 Funds Just to Market the One That Got Lucky

The Incubation Trick: How Funds Secretly Create 10 Funds Just to Market the One That Got Lucky

Mutual Fund Performance, Editors Pick

The Wedding Photographer Problem Imagine a photographer who takes a thousand photos of a wedding and only shows the bride the one perfect shot where everyone is smiling, the lighting is golden, and nobody is blinking. Now imagine that same photographer putting that single photo on their website with the caption “I capture perfect moments

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Why Your Brain Treats a $100 Bill and $100 of Bitcoin Like Two Different Currencies

Behavioral Finance, Editors Pick, Mental Accounting

Your brain is a liar. Not in the malicious sense, but in the way it processes value. Hand someone a crisp hundred dollar bill and watch their eyes light up. Show them $100 worth of Bitcoin on a screen and you’ll get a very different reaction. Same value, wildly different emotional response. This isn’t about

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The Real Cost of a Trade Surplus (and Why No One Will Admit It)

International Finance, Editors Pick

Every country wants to be a winner. And in the grand theater of international economics, nothing signals victory quite like a trade surplus. Politicians beam when announcing that their nation sold more to the world than it bought. Newspapers trumpet the numbers. Economists nod approvingly. The message is clear: we won at trade. But what

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The Math of Recovery: Why a 50% Loss Needs a 100% Gain

Risk & Return, Editors Pick, Investments

We think in straight lines. Our minds prefer symmetry. If something falls by half, we assume it needs to rise by half to return to where it started. This intuition, so natural and automatic, is completely wrong. And this wrongness costs people fortunes. The arithmetic is simple enough. If you have $100 and lose 50%,

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Bordeaux vs. Bitcoin: The Unlikely Investment That Doesn’t Crash on a Tuesday

Forget FOMO: The Real Danger Is Loving Your Stocks Too Much

Editors Pick, Behavioral Finance, Must Read

Everyone talks about FOMO. The fear of missing out supposedly drives investors to make stupid decisions, chasing returns they see in their neighbor’s portfolio or on financial Twitter. Buy high, sell higher, or so the dream goes. But there’s a quieter, more insidious problem that destroys more wealth and causes more pain. It’s the opposite

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The Bitcoin Problem: Where Does Crypto Fit into a Modern Portfolio Theory Strategy?

Must Read, Editors Pick, Financial Economics, Investment Theory, Modern Portfolio Theory

Harry Markowitz won a Nobel Prize in 1990 for work he published in 1952. That work, Modern Portfolio Theory, changed how we think about investing. Now, seventy years later, a technology he could never have imagined is forcing us to reconsider what his theory actually means. Bitcoin presents a peculiar challenge. It behaves nothing like

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