Week In Review Articles:
Pragmatic Capitalism: Why “Buy Low and Sell High” is so Difficult to Implement ” 1. We don’t really know where the lows are. 2. We are all scared shitless at the lows. 3. The procyclical nature of cash flows makes it harder to buy low.”
Barry Ritholtz via Bloomberg: The Markets Don’t Care About Your Wants or Needs “Those who declare that they want higher returns must also recognize that they are also implying a willingness to risk lower returns to get them. That is the very definition of risk. Pursuing alpha, or above-market returns, means you will occasionally forsake beta and matching the market. Any other way would mean a free lunch.”
A Wealth Of Common Sense: 3 Misconceptions About Interest Rates “The point here is you can’t predict housing prices using single variable analysis. There are far too many moving pieces and I honestly doubt that the vast majority of homeowners really care about 50-100 basis points in interest costs when looking to put a roof over their head.”
Of Dollars And Data: Borrow…If You Dare “I know that most of this advice isn’t practical for you. You, like me, will probably never use leverage when investing and that is fine. However, this thought experiment contains a deep lesson: your investment journey will effect you far more than your investment destination.”
Barry Ritholtz via Bloomberg: There’s a Right Way and a Wrong Way to Fail “How did the industry achieve this? By being self-critical and learning from accidents. Every accident, each crash (or near miss) gets studied extensively.”
The Irrelevant Investor: Never Begin With the End in Mind “The best way to guard against the anchor is to think about the investment merits today. In other words, if you had to start over, would you still hold it? To do this objectively might be wishful thinking, which is why biases are so difficult to overcome.”
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