In the summer of 1966, author John McPhee spent two weeks lying on a picnic table in his backyard. Why? In short, McPhee was suffering from writer’s block. As he described it, “I had assembled enough material to fill a silo, and now I had no idea what to do with it.” Investors today find themselves [...]
Making financial decisions, big and small
Some years ago, the scientist Edward Fredkin identified a quirk of human behavior. When it comes to making decisions, Fredkin found, we tend to allocate our time inefficiently. Suppose, for example, you’re at the grocery store, looking for something basic like paper towels. In a big supermarket, [...]
Incomplete information
When it comes to financial decisions, there are, I think, two answers to every question: what the calculator says, and how you feel about it. There’s a fly in the ointment, though: Calculator answers might appear to be based in logic, but they’re still imperfect. Why? Ian Wilson, a former executive [...]
The Less-efficient Market Hypothesis
Benjamin Graham was Warren Buffett’s teacher and mentor. He also ran an investment fund which specialized in uncovering undervalued stocks. One day in 1926, Graham was at his desk, reading through a government report on railroads, when he noticed a potentially valuable footnote. It referenced [...]
Navigating an Investment Minefield
Investors Raj Rajaratnam and Joel Greenblatt share a number of similarities. They’re almost exactly the same age. They both received business degrees from the University of Pennsylvania, and they both started well known hedge funds. But the differences may end there. During the 10 years that [...]
