Nuggets of Investing Wisdom

Nuggets of Investing Wisdom

A website for serious investors in common stocks

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Uncertainty

Let’s cut to the heart of how risk and uncertainty impact diversification

  • by Rodney Smith
  • Posted on November 9, 2020November 10, 2020
  • Part 1: The Field of Play

Diversification is inadequate as a risk management technique and too primitive for the new environment of volatility and uncertainty.

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Do quants with algorithms have an advantage over other investors?

  • by Rodney Smith
  • Posted on August 2, 2020August 4, 2020
  • Part 3: Thoughts for the Individual Investor

Math and algorithms will give precise answers. And therein lies the problem.

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Many investors just don’t understand the risk/reward trade-off

  • by Rodney Smith
  • Posted on May 10, 2020May 10, 2020
  • Part 1: The Field of Play

Take the probability of loss times the amount of possible loss from the probability of gain times the amount of possible gain.

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The conventional view of market efficiency is badly mistaken

  • by Rodney Smith
  • Posted on March 2, 2020January 15, 2021
  • Part 1: The Field of Play

Prices in the stock market are never a reliable guide to the fair value of a stock.

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Acting with imperfect information

  • by Rodney Smith
  • Posted on September 19, 2019November 18, 2019
  • Part 3: Thoughts for the Individual Investor

It is all very good to recommend caution, but decisions must be made. In truth, many policies must be established and decisions made with imperfect understanding of the facts and of the risks.

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