Investing Basics

Investing without a process

Investing Without a Process is Nothing More Than Randomness – A Recipe for Disaster

When you don’t have an investment process, you can only focus on the outcomes, which are almost purely random. You learn nothing from outcomes. With an effective investment process, you know what stocks to buy, when to buy, and when to sell – and there’s nothing random about the outcome.  Throughout my 25 years in …

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When Investing, You Will Be Wrong

It’s markets like these that can bring out the worst in investors’ behaviors. Some investors are afraid to take action for fear of making the wrong decision. Others are quick to react in sympathy with the herd, which almost always moves in the wrong direction. Too often, investors want to focus on the short-term outcomes …

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Sometimes the Simplest Solution is the Best Solution

There is a philosophical principle called Occam’s Razor. Put simply, it states: “the simplest solution is almost always the best one.” This problem-solving principle argues that simplicity is better than complexity. Named after 14th-century logician and theologian William of Ockham, this theory has been helping decision-makers for centuries. As I discussed in the Introduction to my book, …

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