Stock Market Slot Machine

I strongly recommend an excellent article to you, from the Psy-Fi blog, a regular on my daily reading list. The title of the article is B.F Skinner’s Stockmarket Slot Machines: Win Big, Win Rarely, Win Never. I often refer to B.F Skinner, intermittent variable reinforcement, and how the stock market creates superstitions much like those created in Skinner’s birds. This …

Risk Adjusted Return

A topic I haven’t covered in a long time (and, based on a comment left by someone yesterday, some people don’t get ) is risk adjusted return. We have been trained over our investing careers to obsess over portfolio performance when what we should be thinking about is outcomes. Forget the absolute number – will our portfolio do what we …

Know Your Greatest Risk

What is your most valuable asset? Your business? Your house? Your investment portfolio? The pile of gold buried in your backyard? What would you guess? If you guessed anything tangible, you guessed wrong. Your most valuable asset is what economists call your human capital. This is the sum total of the skills knowledge and wisdom you possess which you then …