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Unknown unknowns

September 19, 2011

After observing a pair of poorly-rebadged cars, a series of thoughts about Rumsfeld's "known knowns," "known unknowns," and "unknown unknowns."

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Sell low, buy high

August 13, 2011

The WSJ is running an article comparing today's second-by-second "iPad inverstors" to the day traders of the dot com bubble. The article's point, near as I can tell, is that volatility makes people worry more about the markets, and that people aren't comfortable without instant feedback. I have a suggestion for the WSJ: A decade […]

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Misreading misleading charts: Alaska edition

August 4, 2011

There's a headline making the rounds this morning that caught my eye because it seemed preposterous: "Apple Stock Helping the Alaska Permanent Fund More than Oil." It's everywhere, but the original instigator seems to be this USA Today article. It looks like nobody bothered to read (or understand) the Fund's actual returns. First of all, the Alaska […]

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Demand Media, indeed

July 28, 2011

Jason Calacanis writes: Sad to see Demand Media getting crushed in the market. Demand Media is a content farm (in every negative sense of the word) which (by some accounts) was crushed by Google's most recent "Panda" update that was aimed at removing junk spam Demand Media from search results. So to put this tragedy […]

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QOTD: hindsight edition

July 10, 2011

Kaiser Fung writes on uncertainty and thinking probabilistically about events that have already transpired. The full post is worth a read, but this line sticks out for me: The fact that you won the lottery does not change the fact that economically, it was silly to play the lottery in the first place. This fallacy pops […]

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Words to live by

July 2, 2011

"Hope" is not an investment strategy.

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A product only a banker could love

May 25, 2010

There's a lot of excitement about just-launched startup Betterment, but I'm very wary. At best, it's an example of "bad" financial innovation. At worst, it's a straight up scam. It goes to show that it doesn't take complexity and structured products to pull the wool over investors' eyes; all you need is a website and […]

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The end of the world, relatively speaking

May 7, 2010

Bloomberg has a story today which takes a close look at an Apple investor who was caught in yesterday's turmoil. Apple traded down more than 15% on the day before snapping back to a -4% finish. This particular investor first purchased his 26 shares of Apple in late 2007, for $189. He sold them in […]

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Molehills out of mountains

December 21, 2009

The WSJ has crunched the numbers and concluded that: In nearly 200 years of recorded stock-market history, no calendar decade has seen such a dismal performance as the 2000s. Investors would have been better off investing in pretty much anything else, from bonds to gold or even just stuffing money under a mattress. Since the […]

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QOTD: asset allocation edition

November 10, 2009

After finding former Bear Stearns hedge fund managers Ralph Cioffi and Matthew Tannin not guilty of misleading investors, one juror revealed just how convincing the defense had been: [Juror] Hong said that if she had money, she would invest it with Cioffi and Tannin.

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Things you should know before you invest

November 2, 2009

The WSJ's top story this morning was one titled "The Cruel Math of Big Losses" - an article written as if it were an eye-opening expose into a little-known piece of financial wisdom rather than a blatantly obvious restatement of basic math: when you lose X%, it takes a gain of more than X% to […]

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First rule of trading is you don't talk about trading

October 16, 2009

In a post that caught my eye because it was titled "Smart Risk, Stupid Risk" - but then failed to elaborate in any way - CNBC chimes in with a few caveats about investing during earnings season: You snooze, you lose If you're waiting to find out the earnings before you make an investment in […]

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Haven't we seen this movie before?

October 14, 2009

In a recent profile of KKR, (via the NYTimes) attempted to value the company by taking a look at Blackstone's operations. I don't have any comment on the analysis itself, but two excerpts stood out in my mind: [Blackstone] didn’t do as well collecting performance fees and investment gains because its holdings have been […]

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CNBC thinks Taleb is a bad trader

June 17, 2009

More on Taleb: CNBC is running a piece called "Swan Song: Why Nassim Taleb is Still Wrong." The crux of the argument seems to be this paragraph: Arguing against Taleb is a little embarrassing; who among us wants to side with the plodders when for the price of a paperback you can join the elect? […]

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Something doesn't add up at the PEC

May 1, 2009

AK points out a story from our favorite financial journalist, Jeff Goldberg, regarding the Palestinian Electric Company's surprising 2008 profit of $6mm.  What Goldberg fails to note (citing instead a quote on nebulous "corruption") is that the PEC is paid an unconditional annual fee of $29mm by the Palestinian Authority, meaning they actually hemorrhaged $23mm. […]

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The most irresponsible thing Obama has said

March 3, 2009

The headlines today said it all: Obama: Buy stocks now. The full statement is this: What you’re seeing is profit and earning ratios are starting to get to the point where buying stocks is a potentially good deal if you’ve got a long-term perspective on it. Is he out of his mind? This is perhaps […]

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"It is better to be roughly right than precisely wrong."

January 31, 2009

Despicable though his character may have been, Keynes said some remarkable things, the title of this post among them. He also uttered the cliched investing mottos regarding animal spirits and beauty contests -- true statements all, but widely abused by financial textbooks. My favorite, which remains somewhat unknown despite its enormous relevance, is: The market […]

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