Category Archives for "How To Invest"

The Decline of Buy & Hold

Why you should embrace market-timing with open arms The so-called gold standard of investing – the near-universally revered Buy & Hold strategy – has become obsolete in the brave new world of machine-dominated markets. The value of the equity risk premium (the higher returns from owning stocks rather than bonds or cash) has been in […]

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The Greater Fool Market: part 2

We are in the early stages of the Greater Fool phase of the market. It’s too soon to bail out. “Winter time is coming, the windows are filled with frost. I tried to tell everybody, but I could not get across. I want to be your lover, baby, I don’t want to be your boss. […]

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A Proven Way to Avoid Bear Markets (part 3)

Avoid Bear Markets by Avoiding Recessions Article highlights The worst bear markets are linked to economic recessions Playing defense during recessions can sharply boost returns Capture 80% of the upside while avoiding 80% of the downside This is a rules-based risk management strategy It does not require close monitoring or frequent trading Background This is […]

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A Proven Way to Avoid Bear Markets

This is the second installment of a three-part series about how to avoid bear markets. An Alternative to the popular Buy & Hold approach A systematic, rules-based risk management methodology Designed to reduce equity exposure during weak markets Increases risk-adjusted returns by reducing portfolio volatility Tested and proven effective since 1900 Has added 2.3% per […]

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Characteristics of Highly Accomplished Investors, Part 2

characteristics of highly accomplished investors

In this installment of Characteristics of Highly Accomplished Investors, I drill down into the details to give you a practical sense of what it takes to become a Master Investor. The List of Characteristics In part 1 of this series I listed 11 characteristics or traits that are shared by highly accomplished investors. A quick review […]

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Bear Markets, Recessions, and How to Profit From Them

1987 stock market crash

IntroductionBear Markets are the bane of the investor, with two exceptions: professional traders who specialize in short-selling, and regular investors who have a particular skill. Namely, they have learned how to tell the difference between market declines that are linked to a recession, and those that are not. Those who have mastered this skill are […]

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My Personal Market Dashboard

My personal market dashboard is invaluable to me. It’s both my GPS and my BS detector. I designed it in a way that forces me to confront the facts on the ground, so that my writing doesn’t drift too far from reality. A little backround I have been captivated by the capital markets since I […]

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Critical Thinking Skill #4 – Emotional Intelligence

What Mike Tyson can teach us about Emotional Intelligence When I talk about emotional intelligence with clients, they often think of it as having emotional control over their investing behavior. This is true, but it’s just one aspect of this critical thinking skill. Emotional intelligence is a broader concept. I’ll try to explain it with […]

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Can A Sector Rotation Strategy Beat The Market?

sector rotation 3 wk

We look at how sectors move, relative to the market and to each other. The return behavior of sectors over time offers investors valuable information. This relative return behavior gives us clues about shifting market leadership. How you allocate equity exposure among sectors is a key driver of portfolio performance.  Introduction A popular approach among […]

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The Greater Fool Theory


One of my favorite TV shows in recent years is HBO’s The Newsroom. The guy who writes the show, Aaron Sorkin, is known for fast-paced, snappy dialog. In the final episode of season 1, economics reporter Sloan Sabbith (played by the lovely and talented Olivia Munn) tells her boss, anchorman Will McAvoy (played by Jeff Daniels): […]

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