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?…
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Does Tail Hedging Help A Portfolio?
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…
Investing’s Two Masters: 2021 Year in Review
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 Earliest Advocate for the Geometric Average
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…
Lies, Damn Lies, and Investment Statistics
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…
Nobody Wants Money
There is a theory in marketing that you don’t sell someone a drill, you sell them the quarter inch hole in a wall.1 Taken further: you don’t sell them the hole in the wall, you sell them a picture hanging on the wall. Even still you don’t sell them the picture, you sell them the…
To Stay Sharpe Miss Right
With the US Open returning to the site of one of Tiger Woods’ greatest triumphs, it’s time to re-evaluate investing and portfolio construction from the perspective of Tiger Woods’ golf strategy. This time though instead of looking at the peak and maximizing return, we are going to explore errors and the affect they have on…
Averages are a Bitch
Financial statistics are hard. It’s really difficult to determine the average return of individual stocks. You would think defining typical stock properties would be straight forward, but interestingly it’s not, and I fear many have made false conclusions about stock returns. Take the question: what is a typical return of a stock in the S&P…
Breaking the Market-University
About a month ago I was lucky enough to be a guest on the Resolve Riffs Podcast. For those that saw it, near the end we discussed the idea of creating a list of “courses” outlining the lessons described on the blog (for those that didn’t see the podcast, here is a link). Adam Butler…
Another Year and a New Venture
It’s been another year, another anniversary for this blog, and what a years it’s been. Eighty-three more posts. Two podcast interviews. Thousands of new readers. Many new friends. A good year, but a very strange year. At this time last year nobody truly knew what was on our horizon. For many of us, we were…