Posts Tagged ‘Greed’

3rd Quarter Preview – Heading into the Election

The 2nd quarter distinguished itself by significantly increased volatility and ultimately seeing the unmanaged stock market indexes down. Those same market indexes are still up for the year, and it’s my belief they will end the year positive, but with continued volatility. November is the big election here in the United States, and regardless for whom you feel is better and hope will win, the market likes a reduction in uncertainty. At that point, at least some semblance of planning can be done for a few years by the private sector as it analyzes the tax and regulatory environment it ... Read More

Winners and Losers for the 2nd Quarter 2012

Much of the unmanaged stock market index gain for 2012 was in January, April, and June. May was brutal. In my opinion, you must have a well diversified, long term strategy for your portfolio and for reaching your financial goals. Do you have a plan and strategy you’re comfortable with? If the answer is “no” in any form, I encourage you to call me so we can discuss what needs to happen in order for you to emphatically answer “yes!” to that question. Full Article on Winners and Losers for the 2nd quarter at the link below. Click for Full ... Read More

Don’t Buy on Hype

I have no idea what Facebook stock will do over the next 2 to 10 years. I hope it does great. That being said, the above chart is the reason you don’t buy on hype or let your emotions lead your investment mind. Be the smart money. Do your homework. Know why you buy a stock, under what conditions you’ll sell it, and be sure it’s part of a long term diversified strategy.   Read More

Active Management – Market Timing?

I’m asked periodically what I think of “market timing” or “active management” versus a straight buy and hold philosophy. My first response is usually to ask for a definition of those terms. While it may be obvious to the person asking the question, if you ask 3 people you’ll get 3 different answers. In this week’s video, I propose some definitions, but also share that while I think active management is preferable over your traditional buy & hold, market timing is great in theory but hard to execute in the real world. Click to watch my video. TRANSCRIPT: Good morning! ... Read More

Defeating the Myth You Must Win on Every Trade

If you’ve been following my newsletters over the years, you know I believe in diversification and that one of the key ingredients to reaching your goals is to avoid catastrophic financial events. It’s important to note, as the table above illustrates, that not every investment has to make money. Limiting the size and number of the losses is important, and if avoiding any kind of loss at any time is your strategy, then you’ll always be on the sidelines. Risk management is key, and with that it is understanding some investments will do different things at different times, and not ... Read More

Stay the Course?

Are you a “lane changer”? In traffic, he’s the guy who’s constantly changing lanes, expending a lot of energy but doesn’t really get ahead. We all know we’re supposed to “buy low and sell high”, but unfortunately your average investor doesn’t do that. When we look at the flows into and out of equity funds we find that people are pouring tons of money in when the markets are high and withdrawing at market bottoms. Why? By the time people feel comfortable with the direction of the market (investor confidence is increasing), they’re looking at recent past data and many ... Read More

This is Your Brain on a Hot Streak

Continuing the theme from my video, investor behavior has a significant influence on your success. A recent study found that cells deep in the brain calculate a sort of moving average of past events, giving the greatest weight to the most recent outcomes. So, even after a long term upward trend, or long term downward trend, a few months in the opposite direction can prompt impulsive investor decisions towards or away from stocks. Avoid the knee-jerk reactions. This is Your Brain on a Hot Streak Read More

Better Information, or Just More Information?

The year is almost over and as I prepared for this blog, I thought about a video I did last summer but never shared with you. The summer was so busy and volatile, I wanted to provide you with my current thoughts in such a tough time, so this video (which is one of my favorites) got pushed to the side. The video is about information: more information doesn’t necessarily mean better information. I remember when having more publicly available information was a competitive advantage, but with free internet news sites with up to the second information, that advantage is ... Read More

5 Worst Market Calls for 2011

Even the best can make bad calls. Warren Buffett buying Bank of America? Woops. Bill Gross betting against Treasuries? Yikes. John Corzine? John Paulson? Both very wrong in their market calls. You’ve heard me over past 3 years talk about humility and diversification. My 21 years in the business has taught me that the investment, sector, stock, etc. that I absolutely love is still the one I need to calmly and rationally buy in an amount that I’m willing to be really wrong in and cut my losses quickly if necessary. Even the best can make bad calls. Click for ... Read More

Aberrational Performance Taskforce

The Securities and Exchange Commission has a new computer system that allows them to siff out returns that are, well, too good to be true. While it’s unclear exactly how it works, it compares published numbers from hedge funds with what the computer says is average or what the underlying assets could be worth. If the numbers published are too generous, then the SEC is on the case! Click for more information  Aberrational Performance Taskforce Read More

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7 Mistakes That Make Homeowners Targets for Burglars

I care about you, your family, and your property. I want you to be safe. Here are 7 Mistakes that can make you a target for burglary 1. Leaving the burglar alarm off when you’re running out for a few minutes 2. Posting detailed alarm signs 3. Hiding valuables in the bedroom Click for the rest of the list……. Read More

Forecasting

I’m a big fan of “behavioral finance” as many of you know. This includes understanding the importance of our human nature to the decisions we make in our lives–including finance. This week’s video I talk about the tendency for us to only listen to data that supports our pre-concieved conclusion. As investors, we have to avoid this! Read More

Buffett: “The Lower Stocks Go, The More I Buy”

FORTUNE — “There is no comparison between fear and greed,” Warren Buffett is telling me over the phone from Omaha. “Fear is instant, pervasive and intense. Greed is slower. Fear hits,” he exclaims. I am NOT recommending a wholesale purchase of equities, but rather use this quote from the article below as a reminder how the professional investors think.  You have to keep your emotions in check to the best of your ability. Buffett-link Read More

Lessons from The Big Short

Every wondered what the 2008 Financial Crisis was all about? The Big Short by Michael Lewis is a good, gripping book that explains much of it. I highly recommend it. But what are some of the lessons we can take from this crisis as outlined in the book? That’s what this week’s video is about. Take 4 minutes to watch/listen to it.   Read More

Bank Assets as a Percentage of GDP

One of the problems with Ireland is their huge reliance on banking for their economy. How do other countries fair as a percentage of their GDP? Luxembourg 2,461 Ireland 872 Switzerland 723 Greece 141 US 82 Want the full list?  CLICK FOR FULL ARTICLE   Read More

Warren Buffett’s Worst Trade & Biggest Mistake

I love Warren Buffett. He has such wisdom and humility that I count him as one of my business heroes. What can we learn from him today? How about from his biggest mistake?  CLICK FOR FULL ARTICLE – WARREN BUFFETT’S WORST TRADE & BIGGEST MISTAKE Read More

What’s Worse: Losing Money or Not Making Enough?

It’s the old adage — Greed and Fear. Is the pain of losing money greater than the joy of making money? The problem is that most people NEED to take some risk to realize their retirement goals because the rate of return needed is greater than the risk free return. With inflation, there’s opportunity cost as well. One of the things I do for clients is work with them to balance these competing desires of growth and principal protection. Call me if you’d like to discuss this in your situation. Click on the link for a discussion of which is ... Read More

Ten Things Making Me Nervous

If you look back at my 3rd Quarter Preview (here) I mentioned I forecast the 3rd quarter would be up. That’s proving to be a great move (if I do say so myself). But what makes me nervous? This article sums up a lot of my feelings. Does that mean I’m bearish for the 4th Quarter? I guess you’ll have to wait until my 4th Quarter preview in a couple of weeks to find out. Click on this link for FULL  ARTICLE   Read More

How to Tell When a CEO is Lying

No, this isn’t a setup for the punchline “his lips are moving”. This article details the findings of some researchers that looked at 30,000 conference calls to identify any “tells” of “mistruths”. Interesting……. Please click for HOW TO TELL WHEN A CEO IS LYING   Read More

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The Dow Jones Industrial Average is an unmanaged, price-weighted index of 30 large capitalization stocks with dividends reinvested.

The Standard & Poor’s 500 Index (“S&P 500”) is an unmanaged, market capitalization weighted index of 500 widely held stocks, with dividends reinvested, and is often used as a proxy for the stock market.

The Nasdaq Composite is an unmanaged, market capitalization weighted index of stocks listed on the Nasdaq Stock Exchange, and are reported as price return without reinvestment of dividends.

Indexes are often used as a proxy for the stock market and cannot be invested in directly.