Education

4 Prevalent Investor Biases And How To Manage Them

If you had to analyze every decision you make on a given day, you probably wouldn’t get much done. You might not even make it to work. Once awake, analyzing whether you should brush your teeth first, then shower then shave or change the order would surely slow down your…

Investors: The Dangers Of Performance Chasing

The most prevalent disclaimer in the investments world goes something like this – “past performance may not be repeated”. If you don’t believe us, just read the disclaimers from investment firms, including ours. Despite the prevalence of this disclaimer, investors often place the lion’s share of their decision making process…

Behavioral Bias: How Investors Can Profit From It

All investors make errors that can often be traced back to a behavioral bias or emotional mistake. If under certain circumstances these mistakes are systematic, then it is not a stretch to believe we can develop systematic strategies to profit from them. After all, this is the essence of active…

Trading Strategies: Intra-day VXX Spikes

With the equity markets in a steady melt up, multi-day implied volatility spikes have all but disappeared. Any dip in equities now lasts mere minutes before the dip buyers arrive and push prices into the green. While this price action won’t continue forever, it does prompt us to look at…

Generating Alpha: The Holy Grail Of Investing

The holy grail of investing is generating alpha, adding performance relative to an appropriate benchmark. Portfolio managers around the world throw unimaginable resources at this quest that often proves elusive. It is all about getting an edge. Some use deep fundamental analysis, digging into the financials to uncover mispriced companies…

How To Trade An Iron Condor

An Iron Condor is an options trading strategy where the seller of the Iron condor is looking for the price of the underlying security to remain in a relatively tight range and the buyer is looking for the price to move out of a defined range. To understand the Iron…

Understanding the Ups and Downs of Investor Behavior

“The investor’s chief problem – and even his worst enemy – is likely to be himself” – Ben Graham Investing is not easy. If you are an active investor, directly involved in the investment process, it requires an immense amount of work. Picking investments, developing a buying process and a…

3 Golden Nuggets of Wisdom for New Traders

One of the biggest hurdles in trading is overcoming our natural tendencies (or bad habits) we bring with us when getting started. If we’re not careful, these seemingly small behavioral biases can turn into big problems and prevent bigger success down the road. The three biggest trading challenges I see…

Passive vs Active Investing Debate: When and Why?

In 1950, 90% of U.S. stocks were owned directly by households, with the rest owned by international investors and funds. During the 1970s and 80s, pension and government retirement assets ballooned, reducing households to about 55%. In the 1990s, it was the rise of mutual funds, which drove household direct…

No Need To Panic On Outside Days

The S&P 500 Index (INDEXSP:.INX) put in an outside day on Monday. This deserves respect from traders and investors of all time frames, as well as an understanding of what it may mean for your time frame. As a long-term investor, I’ve built out my technical toolkit to help me capture…