When Ed Thorpe played blackjack to beat the casinos at their own game, he did it by strategically betting into “good decks” and staying away from bad decks. Can you apply this same idea to investing by investing into good markets, and staying away from bad ones? I believe you can, which is why Geometric… The post Card Counting the Market: The Importance of Cash appeared first on .|
I keep thinking about the book Safe Haven and Mark Spitznagel’s preferred methods of investing. I’m struck with how similarly we view the nature of investing markets, but how differently we approach investing. How can we agree on the same ultimate challenge (maximizing the geometric return), and then form such different solutions to the problem?… The post Two Roads Diverged appeared first on .|
Tail hedging seems to be the talk of the investment world these days. Tail risk hedge fund managers are writing popular books. Others are becoming financial twitter rockstars. Are you behind the curve if you aren’t in on this game? Well to answer this question we first have to understand what tail hedging is and… The post Does Tail Hedging Help A Portfolio? appeared first on .|
In a way investing has two masters and it’s very difficult to please both of them. While studying Geometric Balancing, I would spend hours going through the backtest attempting to imagine what investing through each year would feel like. How did it feel in the good times? How painful were the bad years? Since we… The post Investing’s Two Masters: 2021 Year in Review appeared first on .|
As a side effect of writing publicly, when I find others work quite similar to my own I often wonder if they were influenced by one of my posts. Normally I assume it’s probably a coincidence. But sometimes the topic is so unusual–and an approach not often found in investing– that the coincidence seems less… The post The Earliest Advocate for the Geometric Average appeared first on .|
If you’ve been paying attention, the last three trading days have been interesting to say the least. Volatility is popping in all assets. Correlations are flipping more negative. The portfolio was fairly focused in stocks for November, which was nice as stocks had been doing well and bonds and gold not so much. But that… The post Portfolio on 11.30.21 appeared first on .|
Investment statistics often lie. Sometimes they lie purposefully. Sometimes they lie unintentionally. I’ve looked at lots of investment statistics through the years, and I’ve come to distrust many published numbers. It’s too easy to game them. Even when honest, they don’t cleanly compare between strategies. Either way, to successfully evaluate an investment, you need to… The post Lies, Damn Lies, and Investment Statistics appeared first on .|
I used to think there was a perfect investment that was best for everyone. A part of me still hopes that’s true, and I use this vision as a proverbial pot of gold to keep driving my investment research forward. But even if I reach the end of the rainbow, I now believe each investor… The post Your Personal Geometric Frontier appeared first on .|
Lots more volatility today. The portfolio has stayed in stocks because while the market has been falling, it’s been doing so slowly, with little volatility. Stocks and Gold have recently had far higher volatility, and have shown a tendency to be fairly correlated with stocks, so the portfolio leaned towards equities. But today changes that… The post Portfolio on 9.20.21 appeared first on .|
Imagine you’re recently retired and living off your savings and investments. You feel fairly comfortable that you have enough invested to live on for the rest of your life, but you would like to be able to pass on some inheritance to future generations as well. You’re deciding between two portfolios: Portfolio A, which you… The post How to Maximize Wealth in Retirement appeared first on .|
profiting from randomness| breakingthemarket.com
The equity premium puzzle has troubled economists for over 30 years. I’ve solved it, and in the process identified a major flaw with investment theory. Put simply, the puzzle is: “Equities (stocks) have provided a real return of about 7% for the last 100 years. The risk-free rate (treasury bills) has provided about 1% of…| breakingthemarket.com
