Although I love to test trading systems and write about new trading ideas the last couple of months I have been doing a lot of reading about Charlie Munger and his mental models.
Mental models, in essence, are ideas or concepts that help us understand how the world works. Concepts such as the confirmation bias, availability bias, hindsight bias and regression to the mean.
I’ve found that learning about these concepts can really help improve all areas of your life including trading and investing. Read more »
Successful investing is both an art and a science.
We can see this must be true because if investing was purely a science then the richest investors in the world would all be professors and academics. Read more »
I have spent much of the morning reading Misbehaving: The Making Of Behavioral Economics by leading expert and professor, Richard H. Thaler. This is a book that offers a full introduction into behavioral economics whilst managing to still be entertaining and readable. Read more »
Visa Inc. ($V) is a multinational financial services company that facilitates the transfer of funds around the world via Visa-branded credit cards and debit cards. If you didn’t already know that you must be living on another planet because Visa is everywhere. Here are 10 reasons why you might want to buy the stock today. Read more »
How much money would you have made if you’d invested $500 a month into Apple stock over the last 15 years? What about other major US companies like General Electric, JP Morgan or Visa? Is this even a good investment strategy? In this article, I find out.
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With everyone talking about the Federal Reserve this week, there is an awful lot of noise surrounding what the Fed will or won’t do. It’s at times like these where it pays to keep a bit of perspective and remember to not do anything rash.
Following are a number of charts that I have compiled from various sources that should be essential for new investors and traders alike: Read more »
When it comes to investing in stocks, I like to look at things that others might miss. Things that are not so easily defined or measured, you could say.
Many investors, for example, look at the PE ratio of a company or the items on it’s balance sheet. Some investors might look at chart patterns, or projections of earnings. Read more »
In this article, I look at a simple way to add ETFs to your trading system so you can hedge a portfolio without having to use the custom back-test interface. Read more »
When you’re new to investing it can be difficult to separate out the noise from the truth. There is a whole industry out there dedicated to keeping you updated with market events, telling you which stocks to buy, which stocks to dump, and when to do so.
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I don’t know why but I was lying in bed last night thinking about confirmation bias in stocks. So I thought I’d write a post about it.
See, if you don’t know what confirmation bias is, you might be making all sorts of little mistakes without even knowing it. Read more »
The price-to-earnings ratio, or PE ratio, is one of the simplest but most popular financial ratios for estimating the value of a stock. Even though the PE ratio is simple, it’s an amazingly useful tool.
In fact, a study by Merrill Lynch found that 33% of professional investment managers consider the PE ratio before investing in a company. And one of the most famous value investors of recent times, Peter Lynch, was known to make good use of the PE ratio in his analysis. Read more »