(continued)
So let’s do this. We must remember: higher risk does not equal higher reward. Higher risk means there is potential for higher reward at the cost of potential pain. If, in comparison to stock B (which is trading at $10, has no risk, and will reward you nothing above inflation—sound like a Treasury bond?), stock [...]
One of the most fundamental things to think about in the investor’s mind is the concept of risk. Interestingly, it can be the biggest thing many of those investors either think about wrong or do not think about enough. So let’s think about this.
Everyone who has followed financial theory directly knows well that teeter-totter [...]
I would rather chew off my very own right forearm, than buy a share of Google. And I’m right handed too. That’s right, I would rather look up smiling that uniquely red, sinew strung grin, and proclaim to all within ear shot that as quite clearly was evidenced by the horrific sight that could be [...]
I often receive terrific questions, via e-mail, regarding a variety of topics often relevant to many of the things I enjoy discussing on this blog. Truly thoughtful stuff. When answering them, I often encourage the inquirers to post questions such as the ones they asked in the blog itself in an effort to facilitate more [...]
Who is Danny Merkel? Danny Merkel runs two very useful blogs (both of which I have on my blogroll if you would like to find them in the future). One blog is the Gold Stock Prophet, the other is Trading With the Trend.
Two things occurred to me after reading a comment on his blog [...]
(continued)
Why in the hell is any of this even necessary?
Simply: The worst possible thing we can do, as the most prudent class of investors the world has ever known, is to think we can second guess this irrational beast: to think she can ever be rational or that we can fully understand her, [...]
(continued)
So again: On one hand, the market is rational because it’s a market. Markets do special things. Largely, they dictate prices. The process of dictating prices is generally a knowable thing. I’m in the desert for four days and now a gallon of water is the price I place on my very life. A high [...]