Earlier this spring, Emil Verner, an economist at MIT, made this observation: The stock market, he said, seemed to be exhibiting “excess tranquility.” Despite an ongoing war, inflation and other negative headlines, investors seemed surprisingly unfazed. The market was on track for its fourth year in [...]
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 [...]
Staying the course
Wall Street analysts, magazine editors, economists, academics—they’ve all found it virtually impossible to make accurate market forecasts. That’s why Vanguard Group founder Jack Bogle gave this advice to investors: When markets go haywire, “don’t do something. Just stand there.” Warren Buffett [...]
Avoiding the incinerator
A while back, I was speaking with the manager of a mutual fund. In describing one of the stocks in his fund, he noted: “I owned it for a while, then I sold it, but then I bought it back.” It was a surprising comment since frequent trading is, in most cases, generally unproductive. Indeed, Warren [...]
Bad timing
Perhaps you’ve seen a chart that looks something like this: The message: Investors who try to time the market in search of better returns often end up damaging their returns. To many investors, this seems intuitive, because trading isn’t easy. But to others, market timing seems to make a lot [...]
