After being retired for 20 years, we have the opportunity of enjoying a much lower tax rate on the same average dollar amount of investment returns. When our investments are passed on to our children there will be no one-time full marginal rate tax to pay.
Before practice, opportunity, and luck can combine to create expertise, the would-be expert needs to demythologize the achievement of top-level performance, because the notion that genius is born, not made, is deeply ingrained
In effect they acknowledge that going down the Capital Asset Pricing Model rabbit hole with Alice did not get them to Wonderland. Their solution is to go further down the same rabbit hole.
The defining feature of randomness of a series of data is that each data event be independent from all other data events in the series.
If the current gold bubble bursts, as the 1970s gold bubble burst, it might take decades for gold investors to recover their investment in real terms without any dividends or interest payments along the way.
He’s encouraging a kind of groupthink or social proofing. He tells us that everyone he talks to says there’s more reason for anxiety than in recent memory. He is inviting us to believe it is true.
The riskiness of an investment is not measured by beta (a Wall Street term encompassing volatility and often used in measuring risk) but rather by the probability — the reasoned probability — of that investment causing its owner a loss of purchasing power over his contemplated holding period.
The concept of this research is to capture results associated with a long-term investor (we assume a 5-year holding period) that has incredible stock-picking skill
The strong bias toward believing that small samples closely resemble the population from which they are drawn is also part of a larger story: We are prone to exaggerate the consistency and coherence of what we see.
Kahneman is telling us that an ordinary person might, without being thought silly or irrational or cowardly, reject the single bet but decide to take on the 100-bet game.
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