Every rational investor realizes that it is foolish to expect every buying decision to be correct. If we acknowledge that not every decision will be correct, it becomes important to define, in advance, what being incorrect looks like. That definition is your exit. There are a lot of ways to do this, but designing an exit strategy should take a few things into consideration: Continue reading
The decision regarding what and when to buy receives the vast majority of investor attention, but may be the least important part of the entire process. It’s not that security selection is unimportant, just less vital than things like the exit and position sizing strategies.
I believe it is a mistake to consider the entry as a standalone, or singular process. Rather, it is merely the front half of an investment process. With this in mind, my entry strategy relies on a few basic concepts: Continue reading
“In every block of marble I see a statue as plain as though it stood before me, shaped and perfect in attitude and action. I have only to hew away the rough walls that imprison the lovely apparition to reveal it to the other eyes as mine see it.”
Sculpting was pretty straightforward for Michelangelo, he just took a chisel to a big block of marble and chipped away everything that wasn’t a statue. A similar approach can be used by investors. Continue reading
Originally published 12/16/2009
In the Pine Barrens episode from the third season of The Sopranos, Paulie & Christopher think they have killed a Russian mobster and travel to the Pine Barrens of New Jersey to dispose of the body. After arriving, they open the trunk to find him still alive. Ultimately the Russian escapes while Paulie & Christopher become hopelessly lost in the woods. Paulie calls Tony to report what has happened: Continue reading
Originally published 2/23/2009
On June 28, 1914 Gavrilo Princip was one of seven assassins spaced along the Appel Quay in Sarajevo waiting for the motorcade of the Archduke Ferdinand. The first of the seven lost his nerve as the cars passed. The second rolled a grenade under the royal car, but the bomb had a long fuse and exploded under the next car in line. Naturally, panic ensued and the rest of the motorcade sped off before another assassination attempt could be made. Continue reading