Category Archives: investment theory

You Are Lying To Yourself


We all do it. Consciously or not, we all lie to ourselves and it costs us money.

“The majority of your beliefs, particularly in business, are driven by what you want to be true.”    -Tom Asacker, author of The Business of Belief

We form beliefs about things based on experiences and perceptions that are often just fragments of reality. An initial impression or a bit of passed down wisdom that we’ve heard from a young age can have an enormous and long-lasting effect on our expectation of how things are supposed to work. This leads us to mainly see only what we already believe and discount things that challenge those beliefs. It’s called confirmation bias and it’s probably costing you money right now.

For example, let’s say you’re Continue reading

The Strategic Investor: Part III, Go Slow to Go Fast

the-tortoise-and-the-hareAesop was the author of the most tortured parable in the history of finance. Everyone knows that you’re supposed to bet on the tortoise over the hare. Slow and steady wins the race. It’s a winning message. Everyone likes the idea of steady returns. Steady feels solid.

The desire for constant action irrespective of underlying conditions is responsible for many losses in Wall Street even among the professionals, who feel that they must take home some money every day, as though they were working for regular wages.
-Jesse Livermore

Steady would be fine but, when it comes to the capital markets, it’s unrealistic. Investment markets are never permanently steady. They can be intermittently steady though. We’re coming off of Continue reading

The Strategic Investor: Part II, Hating the Win

chess-strategyThe first part of this series was about how learning to “love the loss” could provide protection, put us in front of more opportunities, unlock time and help make us more objective thinkers. The indirect strategy of gaining by losing can be extremely effective when done right. This part of the series addresses the corollary to loving the loss – hating the win. Continue reading

The Strategic Investor: Part I, Learning to Love the Loss

What was the most memorable line of the original Karate Kid movie? Probably, “wax on wax off.” Remember that? This was the part where Mr. Miyagi had Daniel painting his fence and sanding his deck and waxing his cars:

Miyagi: [Miyagi returns from fishing as Daniel is painting the house] Oh, miss spot.
Daniel: What spot? Hey, how come you didn’t tell me you were goin’ fishing?
Miyagi: You not here when I go.
Daniel: Well, maybe I wanted to go, you ever think of that?
Miyagi: You karate training.
Daniel: I’m WHAT? I’m bein’ your goddamn SLAVE is what I’m bein’ here man, now c’mon we made a deal here! Continue reading

Becoming Antifragile


This post is inspired by Nassim Taleb’s fantastic book, Antifragile: Things That Gain From Disorder. As someone who has spent years thinking and writing about similar ideas on a much more primitive level, it is both humbling and exhilarating to read a book that so brilliantly describes concepts of vulnerability and risk and resilience.

People make a lot of sacrifices to save for retirement. Money that could be spent on jet skis and exotic vacations is instead salted away so it can be used decades later. We do this because we don’t want to be fragile. We don’t want to be beholden to the whims of a third party, so we build up this pot of money to create independence. Unfortunately, this money often ends up invested in a way that creates an entirely different, yet equally dangerous type of fragility. Continue reading