Tuesday, 12 February 2019

Berkshire Hathaway (BRK) vs S&P 500 Index (SPX)

Why Warren Buffett is the Greatest Investor in Modern History:

Berkshire Hathaway +3669.89% vs S&P 500 Index +678.74%, 1990 - Present:

When you outperform the S&P 500 for 29 years and do it by a factor greater than 4, you're the Michael Jordan (or Warren Buffett) of investing.

Thursday, 7 February 2019

Quote From 'Reminscences of a Stock Operator'

This is in the context of Livermore recounting the fact that he discovers that he wins whenever his trades are based on precedent he wins, and when they're based on blind impulses he loses. 

A quote to remember whenever the gambling instinct arises:

"The desire for constant action irrespective of underlying conditions is responsible for many losses in Wall Street even among the professionals, who feel that they must take home some money every day, as though they were working for regular wages."

Wednesday, 6 February 2019

Finance: The Time Value of Money

Inflation and the Time Value of Money:

Definition of inflation: Rate at which prices as a whole are increasing. 

When a bank offers to pay 6 percent on a savings account, it promises to pay interest of $60 for every $1,000 you deposit. The bank fixes the number of dollars that it pays, but it doesn’t provide any assurance of how much those dollars will buy. If the value of your investment increases by 6 percent, while the prices of goods and services increase by 10 percent, you actually lose ground in terms of the goods you can buy.

Tuesday, 5 February 2019

Dollar Stiff as a Board

Fed goes from 3 hikes 0 hikes in a matter of weeks, fastest U-turn in history made by the largest central bank in the world, and USD stiff as a board. tells me a lot.

Hate to see what happens to Euro during next recession. Sub-zero interest rate policy or more Quantitative Easing only option. Sub-zero rates only untried policy option of the two.

Real GDP +3.4% and that's all that really matters at the end of the day for the U.S; though, Fed's U-turn could imply 3.4% is tentative.

Note: Fed in relatively safe position compared to ECB and BOJ in terms of policy preparedness for next recession. ECB and BOJ are elephant in room. This sets table for bid Dollar near/medium-term.

Sunday, 3 February 2019