Nuggets of Investing Wisdom

Nuggets of Investing Wisdom

A website for serious investors in common stocks

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statistics

The Achilles heel of the quantitative analysis of stocks

  • by Rodney Smith
  • Posted on March 6, 2023March 6, 2023
  • Part 7: Building and Managing a Portfolio

Something that knocks the pins out from our normal understanding of price earnings ratios, return on invested capital, discounted cash flow analysis, smart beta/factor ETFs, value at risk models (VAR) and even company financial statements

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A set of rules to develop a behavioral edge – Part 6

  • by Rodney Smith
  • Posted on November 27, 2022November 28, 2022
  • Part 2: Human Foibles and Investment Decision Making

The strong bias toward believing that small samples closely resemble the population from which they are drawn is also part of a larger story

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The search for a better guide to stock values

  • by Rodney Smith
  • Posted on October 2, 2022October 3, 2022
  • Part 7: Building and Managing a Portfolio

Can we improve on the accuracy of these estimates by obtaining estimates from, say, 22 leading investment banks and averaging them?

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Quantitative vs intuitive in investing

  • by Rodney Smith
  • Posted on August 15, 2022August 15, 2022
  • Part 2: Human Foibles and Investment Decision Making

Human decisions affecting the future, whether personal or political or economic, cannot depend on strict mathematical expectation, since the basis for making such calculations does not exist.

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The danger of specious statistics

  • by Rodney Smith
  • Posted on June 20, 2021July 6, 2021
  • Part 2: Human Foibles and Investment Decision Making

Small samples, sample period and survivorship bias, as weaknesses in statistics, exemplify a problem in our ordinary reasoning.

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Does Wisdom of Crowds apply to earnings estimates, price targets, value estimates and stock prices?

  • by Rodney Smith
  • Posted on October 11, 2020January 14, 2021
  • Part 2: Human Foibles and Investment Decision Making

The behavioral tail can wag the statistical dog

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