Investing & Economics

On the Dangers of Conflating Experience and Expertise

Ben Carlson at A Wealth of Common Sense published an article about how many investors conflate experience and expertise in markets. This is one of the most misunderstood aspects of the investment business, and costs investors billions each year.

read more

SNB, CHF and Our Colleague…

The Swiss Franc (CHF) was the talk of the financial world last week. We feel compelled to write something about it, but our response will be measured because we know someone directly affected by the situation. You see, we have this colleague…

read more

The Ever-Depressing SPIVA: 2014 Mid-Year

The Mid-year S&P Dow Jones Indices SPIVA Canada Scorecard is out, and it’s everything that we’ve come to expect from the discretionary stock-picking world. But this time was unique even by our standards in that, for the first time in memory, not a single Canadian Dividend & Income equity fund outperformed it’s benchmark over the last 5 years.

read more

Why Monkeys Hate Losing Grapes and You Hate Losing Money

In a famous experiment popularized by the the 2009 book SuperFreakonomics, Dr. Keith Chen conditioned Capuchin monkeys to understand the utility of money to purchase treats. It was compelling enough that the monkeys showed demand elasticity – they bought less of certain treats when prices rose and more of other treats when they fell – but the real breakthrough was when the researchers introduced two gambling games.

read more

Don’t Invest in What You Know

It’s common market wisdom that non-professional investors should “invest in what you know.” This makes intuitive sense, since we obviously have an informational edge in sectors that we work in. Furthermore, it’s scary and requires extra effort to investigate areas of the market in which we have no experience.

read more