Stan Druckenmiller about the Endgame – Is the best really behind us?

There are lots of observant people around who on the one hand are delighted about the strength of the US economy and the (stubborn) health of the US equity market, but on the other hand point to a number of facts that in normal times would give rise to concerns. Now fortunately it seems, we don’t live in normal times any more, hence, we can largely ignore the ‘statistics-relevant-in-normal-times’. Shall we? Continue reading

CFA Level 3 Season starts again

The New Year has just started and that rings a bell for a number of students of a finer art, namely financial analysis. Every year, some of them set out on a journey to master the final level of the CFA curriculum [1], Level 3. Comes end of May, the students’ studies will have much progressed and the exam takers will be in top form to tackle the final 6-hour treatment of the finest. Shortly before that, it will be urgent time to look through the secret sauce of tricks and hints to pass all remaining hurdles. Some of those tricks have been published now to avoid a late-minute rush…. Continue reading

In Memory of Greg Smith and Goldman Sachs

In case you missed this story, please visit the link to The New York Times article:
Greg Smith is leaving the investment bank after many years, revealing what the investment bankers do with their clients: nicely or not so nicely dealing with them and from time to time calling them “muppets” and more…,well, they stop short of eating them, of course. Nobody eats clients. Not even in fiction. Continue reading

The Apple Is On A Roll

Anybody who doesn’t know about iPhone, iPad, or iPod? It seems the California-based company is enjoying the best time of its life, or maybe times are getting even better in the months and years to come. After good quarterly figures, the company looks as strong as never before. Where is the company today in the hit list of the most expensive enterprises in the world? Will its share price rise and reach out to the moon? Continue reading

About The Beauty Of Stock Markets

From time to time, stock markets reveal their real beauty. Not only when they are going straight up for investors being long the stock (as they do now in Jan 2012), or when they keep diving deeper and deeper for short sellers (as they may well do later in 2012 when the January euphoria will have evaporated), but also when investors take a moment of rest, and the markets are looked at from a distance, over a long time period. That’s the moment when they reveal their true inner beauty, pure elegance. Continue reading

Worried About Your Stock Portfolio? Go And Insure It

The economy is swinging back and forth; are we back in a recession, yes or no; will the weak governments now eventually default on their debt and when; will the Chinese soon pull out from funding US government debt and will they ever chip in money into the European Financial Stability Facility; will all this hurt share prices and my investment portfolio; how painful will it be; anything I can do about it? …. Such questions are floating around en masse in the big world of small investors. One answer is: Yes. Manage your risk and insure your investment portfolio. So then, how? Continue reading

Biases Part II: What Corporations Can Learn From Behavioural Finance

On Dec 19, 2011, I wrote about this topic. Here is a follow up on this matter. Our goal is to look into the toolbox of Behavioural Finance, understand the biases they talk about, carry the toolbox from its place in finance into the world of corporations and enterprises, and see what the key bits mean in that every-day context. Continue reading

What corporations can learn from behavioural finance

Behavioural finance, as a complement to traditional finance has long been trying to understand how people make decisions. This with the goal to eventually help investors improve their economic results, speak make their portfolios more efficient in the sense of modern portfolio theory (or put simply, make more money for given risk). The discipline, borrowing from psychology, has uncovered numerous biases that distort people’s decision making, typically to their detriment. Now then, there are lots of fruits to harvest from those studies, not only for professional investors and traders, but equally for the Sunday afternoon private want-to-be stock market player or the corporate citizen involved in day-to-day projects in their company. Continue reading

Making investments – what to look out for!

When investing in shares of publicly traded companies, investors (specifically private ones) can do at least the following: make a bet, ask for a hot tip of a friend, ask a financial adviser, pull a well-remembered company name out of their memory, consult an investment magazine, or do some homework and study the fundamentals of the companies. Investors beware: Even fundamentals can be highly misleading. Continue reading