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…
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…
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…
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…
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…
“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…
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…
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…
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…
Much is made regarding price action and day type classification. To keep things simple, let’s consider four possible day type classifications for this article. We can have: Inside range Outside range Up range Down range These are all pretty self-explanatory and are simply defined by comparing the current day’s (or…