Category Archives: Investment Concepts

Try to Avoid Minsky Moments

Hyman Minsky was an economist whose theories were largely ignored during his lifetime and forgotten since his death in the mid 1990’s. They were forgotten until they became glaringly relevant during the financial crisis of 2008. Even today, his work … Continue reading

Posted in Investment Concepts | Tagged , , | Leave a comment

002 Cognitive Bias: Mental Accounting

Notes from Think Like the Great Investors by Colin Nicholson: New investors are always looking for a guru or a perfect system to tell them what to invest in. This is flawed because no system is perfect all the time … Continue reading

Posted in Investment Concepts | Tagged , , | Leave a comment

001 Cognitive Bias: Overconfidence

Notes from Think Like the Great Investors by Colin Nicholson: Studies have shown that we are more likely to be confident when we try to estimate something when that thing is difficult to estimate than when it is comparatively easy. … Continue reading

Posted in Investment Concepts | Tagged , | Leave a comment

Women are Better Traders Than Men

In Think Like the Great Investors, Colin Nicholson points out that studies have shown women tend to be better traders. Some of the advantages women have include are they: are less confident; take less personal credit for their success; spend … Continue reading

Posted in Investment Concepts | Tagged , , , | Leave a comment

Think Like the Great Investors: Colin Nicholson

Colin Nicholson is a finance academic on the finance speakers’ circuit in Australia and this is not his first book on investment. In this book he looks at aspects of the psychology of investing. The book is in three parts. … Continue reading

Posted in Investment Concepts | Tagged , , | 3 Comments

Context Adds Value 03

Pepsi has often tried to prove that its cola tastes better than Coca Cola. It tried to prove it by conducting blind taste tests which showed people preferred the taste of Pepsi when they didn’t know what they were drinking. … Continue reading

Posted in Investment Concepts | Tagged , , , | Leave a comment

Context Adds Value 02

An experiment conducted in 1985 asked people to imagine they were sitting on a beach, feeling a bit thirsty and a friend offered to fetch one for them. They were then asked how much they would allow their friend to … Continue reading

Posted in Investment Concepts | Tagged , , , , | Leave a comment

Unintended Consequences of Government Interference in the Rice Market

(710 words) How many people have to die before governments stop manipulating markets? The answer is they will never stop. There have been two major rice crises this century, one international the other national. Both caused many needless deaths, both … Continue reading

Posted in Investment Concepts | Tagged , , , , | Leave a comment

On Contrarian Stock Picking

To be a successful investor requires us to take a contrarian position. We are able to fool ourselves into thinking we are contrarian investors when in fact we are just following the herd. These are my notes from an essay … Continue reading

Posted in Investment Concepts | Tagged , , , , , , , , , | Leave a comment

How to Identify Gentrifying Localities

(710 words) One property buying strategy that has been successful for the past thirty years is to buy near the center of big towns. Even though it’s a well established trend, there are plenty of opportunities. But it is still … Continue reading

Posted in Investment Concepts | Tagged , , | Leave a comment