With market volatility picking up this past week, now is as good a time as any to review why it’s important to take your losses early. If you lose 10%-20% in a trade, it’s not that hard to recover. It only takes 11% – 25% to get back to where you started. But if you...Read More

I wrote earlier this year that the 60/40 portfolio is dead. Well, rumors of its death were not greatly exaggerated. The 60/40 portfolio that served retired investors so well over the past 30 years is gone… and it’s not coming back any time soon. As investors, we have to move on. Rest in Peace 60/40...Read More

I like getting paid in cold, hard cash. And frankly, who doesn’t? But stock dividends are more than just a quarterly paycheck. They are a way of doing things. I would go so far as to argue that they are a philosophy of life (or at least of business). That might sound a little kooky...Read More

My financial practice is an interesting creation of the internet era. I don’t do a lot of face-to-face networking, and I very rarely host dinners or live events. It’s not that I’m against doing these things but rather than they are expensive and time consuming, and I’m not very good at them. If these things...Read More

I was digging through an old file cabinet that had belonged to my grandfather, and I found this little blast from the past: a Walmart (WMT) letter to shareholders from 1985, signed by Chairman and company founder Sam Walton. As a child in the 1980s, I actually remember my grandfather proudly showing me a paper...Read More

My favorite historical anecdote—and one that every investor should be forced to acknowledge reading before opening a brokerage account—dates to the era of the South Sea Bubble. A charlatan whose name is lost to history, published a prospectus for “A company for carrying on an undertaking of great advantage, but nobody to know what it...Read More

Warren Buffett is a hero to many investors, myself included.  His record speaks for itself: 18.3% annualized returns in Berkshire Hathaway’s ($BRK-A) book value over the past 30 years compared to just 10.8% for the S&P 500.  And his returns in the 1950s and 1960s, when he was running a much smaller hedge fund, were...Read More

I originally penned this articled in December 2011.  Given Sears’ stock action in the year that has passed, it’s worth another read. A well-respected value investor buys an old American company in decline, promising to restore its fortunes.  Alas, the recovery never comes.  The economics of the industry have changed, and the company cannot compete...Read More

We all know what “fragile” means.  But what is the opposite of fragile? If you are like me, your instinctive response would be “robust” or perhaps “durable.”  But you would be wrong. Something that is fragile is damaged by an unexpected shock, whereas something that is robust or durable is able to withstand it.  To...Read More

The single most important lesson I’ve learned about being a successful investor is the need to maintain emotional detachment.  Any feelings you may have towards a stock are unrequited.  If you love a stock, it will not love you back.  And if you hate a stock, it will not give you the satisfaction of responding...Read More