Category Archives: Investing

The paradox of investing is that the best investors have a system, but that this system, mindlessly applied, exposes them to the very risks that they’re trying to avoid.  Markets go through phases, and systems and concepts developed during one … Read More

Every so often in an investor’s lifetime the markets will throw us a completely unexpected curve ball.  Markets will fall off a cliff or soar off into the stratosphere. Whether we like it or not, if we invest in the … Read More

The key phrase here is situational awareness.  It’s about having the big picture as well as the focused analysis.  The world, even that part of it tracked by stockmarkets, is a complex adaptive system made up of many working parts.  … Read More

Simplifying things is what we do, habitually.  The world is too complex, too multi-faceted for us to do anything else.  We develop a specific, individual mindset which we use to frame the world we operate in.  Sometimes this is a … Read More

Tim Richards is away, analysing the Eurozone crisis from the lofty vantage point of a Alpine bar. In the meantime this is a series of mini-posts on how to avoid the worst faults of the behaviorally compromised investor based around the … Read More

Dead or Alive, It’s all the Same Amos Tversky’s and Daniel Kahneman’s 1981 paper on The Framing of Decisions and the Psychology of Choice demonstrated that people are risk averse in situations involving potential gains and risk takers in situations involving … Read More

In its latest reports on US and European high yield corporate debt, the ratings agency Fitch flagged up the fact that the trailing 12-month default rate on this asset class rose above 2% for the first time since October 2010, … Read More

Most value investors already know why bear markets are an investor’s best friend.  Bear markets may be scary, but they’re the best time to pick up wonderful businesses at attractive prices. Why the best time?  Because in a bull market … Read More

Capitalism makes it possible to exchange anything for virtually anything else.  All objects become commodities with cash values.  But people get attached to things. Caring more about the personal meaning of their possessions – or their beauty or uniqueness — … Read More

The emphasis of the blame for the current financial situation across the eurozone has been put on governments for issuing large amounts of debt, which have become excessive to the point of collapse. However I am not so sure they … Read More