Thursday, April 17, 2014

A Spectrum of Possibilities (Probabilities)

Most investors like to think in binary terms.  Stocks are either cheap and a buy, or expensive and a sell (or crash!!!).  I’m convinced they think this way along the same lines they like to cheer for sports teams (it’s more fun).  I tell investors using valuation is a spectrum of future possibilities.  While buying expensive markets generally will produce lower future returns, you will have positive outliers.  The same for cheap markets, it’s usually a good idea but they can always get cheaper.  

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Lunch is for wimps

Lunch is for wimps
It's not a question of enough, pal. It's a zero sum game, somebody wins, somebody loses. Money itself isn't lost or made, it's simply transferred from one perception to another.