Category: Investing

Estimated Future Returns

As of writing most stock market around the globe are down around 30%. That is a big decline, especially considering it happened in just three weeks. However, unless you are about to sell assets today or in the very near future, for whatever reasons, you should consider the drop as an opportunity to add to your holdings. No doubt the

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A Leveraged, Capital Intensive, Competitive and Cyclical Business Is Fragile (Some Thoughts On Fragility Vs. Antifragility)

Fragile – handle with care: Fragile is defined as an object easily broken or damaged. When you order something online that is fragile it most likely is labelled as “handle with care”. The reason is pretty obvious: it can’t sustain shocks, knocks, beating or being dropped to the ground.  It easily breaks apart. The opposite is antifragile: Antifragile – do

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Don’t Be Fooled By Your Dividend Bias – Sell Shares To Get “Income”

Introduction and summary: My idea with this article is to show that dividends are simply return of shareholder’s capital (a partial liquidation), exactly the same as selling the equivalent number of shares to create “income”. Admittedly, selling shares to support consumption feels a little like sawing off the branch I’m sitting on. Strangely enough, why doesn’t it feel the same

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The Perils of Selling Short

I signed my first client and proceeded to short my first stock. It almost proved to be my last. Over the next few weeks, I watched the stock trade up to 20, then 30, then 40, finally breaking through 50…..But when the stock climbed past 50, I started to cover, unable to stand the pain. It was too late, however,

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Taxes And Compounding

To shelter your savings from taxation while building your nest egg is extremely important. I believe this is pretty obvious for most investors, but I suspect it’s still neglected because the headwind takes about ten years to really make a difference. Unless you have a tax-sheltered account you will take a beating whenever you receive a dividend or sell a

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Famous Quotes By Warren Buffett

I believe Buffet’s annual letters are an invaluable source of investment knowledge. I recently reread all of them, in addition to rereading Lawrence Cunningham’s The Essays Of Warren Buffett – Lessons For Investors And Managers, a book containing excerpts from all the annual letters.  I have read the annual letters a few times, but I keep rereading them  at 2-3

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Stocks, Investing, Real Estate, Charlie Munger And Inverse Thinking

Charlie Munger likes to think inversely. Inverse thinking simply means focusing on the things you don’t want to happen. Munger didn’t invent this concept, but he has made it immensely popular. While Munger turns the question on its head, he touches upon a very important aspect: how to avoid mistakes. Why does inverse thinking help? Munger says inverse thinking avoids

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Should You Trade Or Invest?

I sometimes receive e-mails from potential traders that want to get “rich” trading. I tell them to instead consider investing their capital for long-term appreciation, preferably via passive or active mutual funds. This is why: The chart shows 10 000 invested annually for 30 years with 9% return: after 30 years you have almost 1.4 million in assets. Not bad!

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My Favorite Quotes from Atul Gawande’s The Checklist Manifesto

Some weeks ago I published an article about what investors and traders can learn from Atul Gawande’s The Checklist Manifesto. I like to take notes when I read (see my notes  on the pic to the left, excuse my eight-year old handwriting). I believe this is a fantastic resource to revert to later. Better, though, is reading a good book

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What Investors And Traders Can Learn From Atul Gawande’s The Checklist Manifesto

This weekend I reread The Checklist Manifesto, a book published in 2010, which argues the case for a systematic approach to our daily work as professionals. Below you find arguments for why I believe a checklist should be a part of the toolkit of any aspiring speculator or investor. Both Charlie Munger and Warren Buffett use checklists. Buffett has a

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