Back to the Future – the benefits of the Pre-Mortem approach You start off with a clear future goal and a plan that will help you to achieve this goal. But the future is uncertain, and we need to have a good understanding of the risks that could cause us to fail at our objectives.…
All the Things We Do Not Know About SVB Barry Ritholz made a couple of sage comments in his article “All the Things We Do Not Know About SVB” that is worth considering: “Armchair quarterbacking the decisions of the Federal Reserve long ago became a blood sport. With the benefit of hindsight, we all are…
How well are you doing in terms of Life Experience Points? Money is important and I don’t intend to knock its significance. The lack of money prohibits access to many experiences. Although that rings true, a lot of the things we want to do early-on in life require health and time, not money. When you…
Money Etiquette and the Big “Taboo” Money is a significant source of stress. More than half of Americans feel embarrassed talking to others about their finances, according to new research done by Questis. But not talking about it doesn’t mean the problem isn’t there. A survey of 2,000 adults examined their relationship with money and…
Short-term Sentiment, Confusion and Misguided Convictions How much time do you spend agonising over short-term economic data? Daily news flow is overwhelming and at times conflicting. As a long-term investor, to what extent does this inform or alter your long-term decisions? Markets are always looking ahead and pricing in future expectations. If the consensus expectation…
Align your Actions with your Timeframe In May 1999 Barron’s published a cover story on Amazon shortly before the tech bubble burst. In the article Jeff Bezos was rubbished as just another middleman and that the idea of him pioneering a new business paradigm was silly. We all know what has transpired over the following…
The Science of Less We confuse activity with achievement. Leidy Klotz in his book “Subtract, The Untapped Science of Less” focuses on this fascinating question: “In designing our worlds, why do we always seem to add, but not subtract?” He writes that we often start with “What should I do more off?” A better approach…
Rube Goldberg and Winning the Loser’s Game Charles D. Ellis in his best-selling book Winning the Loser’s Game suggests that individual investors will be better off by working with the markets instead of against them. Based on historical facts he argues that investors need to avoid short-term traps to concentrate on their long-term strategies. The magic ingredients…
Personal Financial Planning – Shifting from IQ to EQ Consumers weigh the perceived value of products and services against the asking price. Two components affect consumer decisions regarding products and services: What am I paying? – Price What am I getting? – Value When you lower prices your profitability goes down. It’s simple. Discounting everybody…
Real-world decisions are almost always made under uncertainty Life is uncertain. We cannot control many of the things that have an impact on our lives. Some of the most important numbers that you would like to know are unknowable in advance. We don’t have control over these numbers. How long will I live? How much…