Skill, Luck & Outcomes

Originally posted on Mon, 07/02/2018

Most outcomes in life are a culmination of both skill and luck (or bad luck).  How much an outcome is influenced by skill versus luck differs among activities. Basketball is dominated by skill…typically you see the best teams win. Roulette is dominated by luck.  What about investing?

Investing - Simple Yet Difficult

Originally posted on Fri, 06/01/2018

Warren Buffett said, “Investing is simple, but not easy.”  Sounds like a contradiction. But in real life simplicity has little to do with ease. Take losing weight. Very simple.  Burn more calories than you take in. Easy, right?  

Cultivating a 'Firmness of Character'

Originally posted on Thu, 02/01/2018

Benjamin Graham said what investors need, but few have, is a “firmness of character.” What he was referring to is the ability for investors to keep their emotions in check.

Investing success is more influenced by DQ than IQ. Our Discipline Quotient, or ability remain disciplined during emotional times, is what sets investors apart. Exercising investment discipline is a difficult endeavor, but it’s not impossible.

A Reliable Forecast for 2018

Originally posted on Mon, 01/08/2018

Before I get into my market forecast for 2018, I want you to consider why forecasts are so alluring to investors like ourselves. What is the force that influences us to make decisions based on forecasts? There is ample evidence that expert forecasts are correct only half of the time, yet we are still attracted to them. Why?