Investing Strategy

  • 20 Oct
    Now’s The Time To Consider These 7 Hedging Strategies

    Now’s The Time To Consider These 7 Hedging Strategies

    • A hedge is like any other investment. Whether it’s good or bad depends on the price.
    • I’ll discuss 7 unconventional strategies that will give you some food for thought.
    • The best hedge is the free hedge. By looking deep enough, it’s possible to find it.



    Introduction

    Hedging is a very important, but an often-omitted investing strategy.

    The principle of hedging is to own something that will go the opposite direction of everything else in the case of a market crash, protecting your portfolio from potential losses. For example, if you own an S&P 500 portfolio, buying a put option on the S&P 500 gives you security in the event that the market falls as you won’t lose anything as the value of the put option should appreciate at the same rate the S&P 500 declines. More →

  • 18 Oct
    On The 30th Anniversary Of 1987’s Black Monday, Today’s Market Looks Eerily Similar. Should You Prepare For A Crash?

    On The 30th Anniversary Of 1987’s Black Monday, Today’s Market Looks Eerily Similar. Should You Prepare For A Crash?

    • The data indicates that the likelihood of a crash similar to October 1987 is the same today as it was then.
    • This doesn’t mean the stock market will crash tomorrow.
    • It only means that you should know yourself extremely well and relate your investments to your risk reward appetite. Only this can prevent you from the biggest mistake investors usually make, i.e. sell at the bottom of a bear market in total panic and capitulation.



    Introduction

    On Monday October 19, 1987, the stock market crashed a whopping 22.6% in one day. Is it possible that the same could happen tomorrow? Well, let’s compare the current market and to the one back then. More →

  • 17 Oct
    This Strategy Has Beaten Growth Investing 94% Of The Time

    This Strategy Has Beaten Growth Investing 94% Of The Time

    • I’ll analyze market data since 1927, and look at growth versus value returns.
    • I firmly believe that value investing returns can be further increased by applying a bit of common sense.
    • The differences in risk and returns are staggering, but few will actually become value investors.



    Introduction

    It’s almost funny that Eugene Fama, the Nobel prize winner and face behind the efficient market craze, has evolved over time and acknowledged that value investing beats growth.

    The two market anomalies that show how markets aren’t efficient after all are size and value. The findings were published in the now famous 1993 Journal of Financial Economics article by Fama and French, Common Risk Factors In The Returns On Stocks and Bonds. Markets aren’t efficient and you can easily beat the market by following a value strategy and by buying small caps (stocks with a market capitalization below $2 billion). More →

  • 16 Oct
    Doing This Could Increase Your Returns By $2.6 Million

    Doing This Could Increase Your Returns By $2.6 Million

    • It’s somehow accepted that stock returns have been between 8% and 10% in the past. That is correct, but only for a short period in history and it’s not true for all markets.
    • We’ll discuss stock returns over the past 100 years globally which will paint a different picture than what the predominant opinion would have you believe.
    • This doesn’t mean stocks are bad investments, you just have to understand how to go about them. After all, it’s your financial life on the line.



    Introduction

    Currently, most financial advisors will state that the best rational investing pattern is to invest in index funds as it’s impossible to beat the market, and that index funds have been a great investment vehicle over time.

    That would be a correct statement, but the returns that are noted by those who are trying to sell you an index fund are cherry-picked from historical examples. But the truth looks a little different. More →

  • 13 Oct
    Cocoa Prices Are Low, But Should You Invest?

    Cocoa Prices Are Low, But Should You Invest?

    • Cocoa prices are at multi-year lows.
    • I’ll analyze the supply and demand situation to see if there might be profit opportunities.
    • A cocoa ETF isn’t the only way to profit form cocoa.



    Introduction

    Investing in commodities is relatively easy compared to other stocks.

    As an example, to profitably invest in Apple (NASDAQ: AAPL), you should be able to estimate iPhone sales for the next few years. What’s difficult is that there are a myriad of factors that influence iPhone sales. More →

  • 12 Oct
    Want 20% Yearly Returns? Read Sven’s Top 10 Rules For Getting There

    Want 20% Yearly Returns? Read Sven’s Top 10 Rules For Getting There

    It’s relatively easy to get down to the financial metrics for every investment, analyze the company, and know what to expect.

    The difficult part isn’t finding good investments, it’s more about whether our mindset is ready to take advantage of the opportunities the market offers.

    In today’s article, I’ve summarized the investing rules that have helped me in achieving market-beating returns over my 15-year investing career. More →

  • 11 Oct
    How This Little-Known Theory Could Bring You Outsized Returns

    How This Little-Known Theory Could Bring You Outsized Returns

    • Stock prices haven’t been following fundamentals for 5 years now. The theory of reflexivity is the only one that can explain what’s been going on.
    • The main message is that as long as the trend is strong, don’t fight it, but reinforce it.
    • If you want to know when the current bubble will burst, focus on the twilight zone.



    Introduction

    One of the best traders and investors over the last 50 years has been George Soros. Whether you like him or not, his track record is something to respect and learn from whenever possible.

    In today’s article, I’ll describe his reflexivity theory in a, hopefully, much simpler way than Soros has described it in his book, The Alchemy of Finance. More →

  • 10 Oct
    7 Rules For Finding Stocks That Will Double

    7 Rules For Finding Stocks That Will Double

    • I’ll describe 6 stocks that have recently doubled that give us good guidelines on finding the next stock that will double.
    • If you do the research, it isn’t that tough to find stocks that will double or more. Perhaps the reason we don’t always find them is our psychology, predictably.
    • The analyzed stocks include a miner, a wealth management company, a social media company, an education company, a paper company, and a big pharmaceutical.



    Introduction

    I wrote an article not too long ago about where and how to find stocks that will potentially double or even become multi-baggers, and described a few sectors to look at to find these stocks.

    In today’s article, I want to dig a bit deeper and show you what should you look for in a specific stock that can indicate multi-bagger potential or at least a 50% return in a year, as Buffett used to do when he was younger. More →

  • 03 Oct
    Good Debt Explained: Why You May Want To Take Out A Loan To Invest

    Good Debt Explained: Why You May Want To Take Out A Loan To Invest



    • Investing isn’t only about choosing the right stocks, it’s also about proper capital allocation.
    • Taking on leverage to invest can be smart but it can also be incredibly dumb.
    • From an historical perspective, it could be a very smart thing to be ready to refinance your home and invest in stocks.

    Introduction

    Buffett and Munger praise themselves for never taking out loans for Berkshire and one of the most famous Buffett quotes is:

    “If you’re smart you don’t need debt, if you are not smart, you better stay far from debt.”

    However, this is another half-truth that he tells the world. More →

  • 29 Sep
    These 40 Charlie Munger Quotes Tell You Everything You Need To Know About Investing

    These 40 Charlie Munger Quotes Tell You Everything You Need To Know About Investing

    • I like Munger much better than Buffet. Munger will insult you, but you’ll be a better person after the fact.
    • It’s funny how investing principles can be summarized and simplified in a few quotes. The problem is that nobody, or maybe just a few, will actually listen and apply them.
    • We don’t need more than what Berkshire has done in the past 50+ years as a confirmation of how important this is to our investing lives.

    Introduction

    Charlie Munger is Warren Buffett’s partner in crime, but he’s usually not nearly as exposed to all the media attention.

    The difference between the two is that Warren really wants you to like him, while Munger really doesn’t give a f*** about what you think of him. Therefore, if you want the truth and you want to learn as much as possible about investing beyond the classic things Buffett says, you should listen to Munger. More →

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