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Jon

Blog Info

Name:
Novel Investor
Category:
Investing
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Start Year:
2010

Blogger Bio

Location:
Chicago, Illinois, United States
Age:
Unspecified
Race:
Unspecified
Gender:
Male
Life stage:
SINK (Single Income, No Kids)
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Latest Blog Posts

Before Oct 19, 1987, few people believed a 10% one-day loss was possible. The last time it happened it was Black Tuesday — October 29, 1929 — almost six decades earlier. Before that day, the worst day was the day before — October 28, 1929. Those two days were the only known days of double-digit losses for the Dow. Of course, those stats perfectly describe the limits of market history: it can hinder ...
Posted: Oct 18 2017 @ 5:50 PM
I wrote about the reach for yield a few weeks ago. Here’s the dividend stock edition for yield chasing. Alliance Bernstein has a graph showing what investors are getting from dividend ETFs versus a growth stock counterparts. Today, investors are currently paying growth stock prices for dividend stocks. That might be okay if dividend stocks got growth-stock-like earnings growth. But that’s rarely the case. The reason most dividend stocks pay a dividend is that their earnings growth ...
Posted: Oct 13 2017 @ 10:08 AM
Stock picking has been viewed as a faux pas for some time…wrongly. There is nothing wrong with picking stocks if it’s done intelligently. Intelligently can’t be emphasized enough because it’s often done stupidly. Which is why the act gets condemned outright. Except, some investors pick stocks and do it well by using a framework as a guide. In a speech, Charlie Munger offered up his framework that he’s improved upon over his career. ...
Posted: Oct 11 2017 @ 6:38 PM
Anytime Warren Buffett does a deal for Berkshire, he makes the rounds on business news. This week he made a deal and sat for the usual interview with CNBC (video and transcript linked below). These interviews can be hit or miss sometimes because they want his perspective on everything. But two things stood out: the certainty of gravity and taxes. The first is something he’s asked every time and fits with the ...
Posted: Oct 06 2017 @ 10:14 AM
In 1992, Seth Klarman warned investors of being too greedy toward yield. He watched investors chasing anything that came close to the high yields they once earned in the 1980s. Well, history may not repeat but it does rhyme. A similar thing has been happening for a few years now. This time around, I doubt greed is the driver. Rather, fear of not earning enough is pushing investors into higher-yielding assets. Junk ...
Posted: Oct 04 2017 @ 5:45 PM
In 1992, Seth Klarman warned investors of being too greedy toward yield. He watched investors chasing anything that came close to the high yields they once earned in the 1980s. Well, history may not repeat but it does rhyme. A similar thing has been happening for a few years now. This time around, I doubt greed is the driver. Rather, fear of not earning enough is pushing investors into higher-yielding assets. Junk ...
Posted: Oct 04 2017 @ 5:45 PM
Charlie Munger has a unique way of describing the errors of our ways. These “errors” can be simply described as human nature. And yet, overconfidence has a funny way of making people believe they’re immune to these errors. Somehow, they’re the exception to the rule. In an article, Murger wrote about the perils overconfidence can have on something as simple as higher costs on average returns. This was in relation to foundations taking on more ...
Posted: Sep 29 2017 @ 11:41 AM
Charlie Munger once gave a graduation speech in 1986 on how to guarantee a life of misery. He borrowed the idea from a speech Johnny Carson gave several years earlier. Instead of speaking about what leads to a life of happiness, Carson did the opposite. So Carson rattled off three sure things he knew would lead to misery: ingesting chemicals in an effort to alter mood or perception, envy, and resentment. If ...
Posted: Sep 27 2017 @ 5:49 PM
Warren Buffett made a Dow 1,000,000 call this week. He thinks it will be surpassed in the next 100 years. It’s hard to imagine a century from now. That number might even seem impossible to some people, but the math checks out. It works out to a conservative 3.8% annual return over the next century. Really, the number is not that important. What is important is Buffett’s faith in America’s ability to ...
Posted: Sep 22 2017 @ 10:05 AM
The battle over just how efficient the market is and how to define risk has been overdone for several decades. I think most people have come to their senses or have, at least, accepted that markets aren’t nearly as efficient as was once preached. Still, it’s always nice to know that not everyone back in the day fell for a theory that assumed we were all rational beings. That somehow we ...
Posted: Sep 20 2017 @ 6:52 PM

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