How To Hedge Against Tail Risk In The Stock Market (Tail Risk Hedging Strategies)
Tail risk is a form of portfolio risk that arises when the possibility that an investment will move more than three standard deviations from the
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How Did The All Weather Portfolio Perform During Covid-19?
This week I came across this blogpost by Nick Maggiulli about The All Weather Portfolio. What is The All Weather Portfolio? Maggiuli’s blog post is
Continue readingWhy Tobacco Stocks Outperform
Some months ago I wrote an article about the historical performance of so-called “sin stocks”. Tobacco companies have performed the best in the US, and
Continue readingWhy We Can Expect Lower Returns Over The Next Decade
2010-2020 produced better returns than the historical averages: From the start of 2010 until today, 27th of July 2020, S&P 500 returned 250% (dividends reinvested),
Continue readingExpected Returns In A Zero Interest Rate Policy (ZIRP) Environment – Which Asset Class Is Best
The last decade has produced fantastic returns in most global asset classes (commodities excluded), helped by enormous interventions by central banks. Can we expect similar
Continue readingShould You Invest In Stocks Or Real Estate (Or Both)?
Most people invest in real estate, perhaps quite logically since this is a very easy business model to understand. Equity (stocks) is perceived as riskier
Continue readingThe Importance Of Diversification
Harry Markowitz won the Nobel Prize in 1990 for his work in showing mathematically how you can both reduce risk and create better returns by
Continue readingHow Much Can You Pay For A Quality Company And Still Make High Returns? (Future Returns For Quality Stocks)
In this article, we look at how much you can pay for a quality company and still make high and acceptable returns. Perhaps surprisingly, you
Continue readingWhy The Mental And Behavioral Aspects Are Equally Important As The Strategy
No matter how good strategies you have, they are most likely worthless if you can’t execute them properly. What looks like a piece of cake
Continue readingDollar-Cost Averaging: Beat The “Experts” And Build Wealth Over Time (A Dollar Cost Averaging Example)
Summary and introduction: Research shows that the majority of investors underperform the broad market indices. The most likely reason is due to frequent buying/selling and
Continue readingCompounding – The Magic Of A Long-Term Mindset And Delayed Gratification
“Compound interest is the eight wonder of the world. He who understands it, earns it….he who doesn’t, pays it” -Albert Einstein Presumably, Albert Einstein said
Continue readingWhy Women Are Better Investors Than Men
Numerous studies suggest women are better investors than men, which of course might hurt the egos of many men. I find this fascinating, and it
Continue readingDoes Valuation Matter? Less Than You Think If You Buy Quality
Summary: S&P has an estimated P/E of 23 for 2020. Rich valuations sometimes make the best companies’ share price languish. Low interest rates justify high
Continue readingInterview: Short-Term Trading Is A Zero-Sum Game, Investing Is Not
This week I was interviewed about my trading philosophy. In the interview, I mentioned how difficult it is to make money daytrading or swingtrading for
Continue readingSell In May And Go Away – S&P 500
Most traders and investors have heard that you need to sell in May and go away. Is this just a myth or is it correct?
Continue readingThe Best (Little Known) Investment Advice From Warren Buffett
Warren Buffett, the Oracle of Omaha, has been a strong advocate of buying only what you truly understand and only companies where you can estimate
Continue readingSin Stocks And Performance
A certain group of stocks has outperformed the rest of the stock market by a wide margin: Sin stocks. Tobacco, alcohol, arms producers, the gambling
Continue readingA Long-Term Investor Wants The Share Price To Trade Around Intrinsic Value
Let’s assume you buy Disney at 100 and one year later it trades at 130. A 30% return in one year, isn’t that great! Not
Continue readingWhat I Have Learnt During The Covid-19 Crisis
Now is a good time to start a diary Now is a good time to start a diary. It doesn’t have to be long. But
Continue readingEstimated Future Returns
As of writing most stock markets around the globe are down around 30%. That is a big decline, especially considering it happened in just three
Continue readingFragile vs. Antifragile Investing
Fragile – handle with care: Fragile is defined as an object easily broken or damaged. When you order something online that is fragile it most
Continue readingWhy Family Business Stocks Are Better – Why They Outperform (Owner-Operated Businesses Have Skin In The Game)
Why do family businesses outperform? Family-owned businesses outperform the main stock indices. They outperform because they have skin in the game, attract better shareholders, have
Continue readingThe 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
Continue readingStocks, 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
Continue readingShould You Trade Or Invest?
Which is more profitable – trading or investing? Who makes more money – traders or investors? The short answer is that you can get rich quickly
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