2020.06.24 22:24 GMT
Financial markets are unpredictable and stochastic by nature. They depend on many random events and many unknown unknowns. Nevertheless, we have an illusion that markets are predictable when we look retrospectively at historical charts, and suddenly everything makes sense. This is known as hindsight bias or I-knew-it-all-along phenomenon. Events like COVID-19 completely change the status quo and prove that we cannot time markets. This brings us down to Earth and we realize that we, as humankind, have a little control of what can happen tomorrow. But even without black swan events, our perception of randomness is distorted, and this is related to non-ergodicity of financial markets. Nassim Taleb wrote: “There is no probability without ergodicity.” Let's have a look at ergodicity and why financial markets are non-ergodic.
2020.03.22 18:55 GMT
Amid the market crisis caused by COVID-19, it's worth to look at the best investing strategies and how they would perform in comparison with the market returns. The All Weather portfolio is the strategy that can perform better because it balances two main economic forces- growth and inflation. The strategy was engineered by Ray Dalio who is an American billionaire investor, hedge fund manager, and philanthropist. Dalio is the founder of investment firm Bridgewater Associates, one of the world's largest hedge funds.
2020.03.19 22:04 GMT
We start our first post with a famous twitter-storm written by Naval who is a prolific tech investor and founder of AngelList. If you have never heard about him, I highly recommend checking his twitter account that is a source of pure wisdom. His tweets are short, smart but precise. Each tweet focuses on one idea. Many of them seem obvious but the point is not to know but understand, realize and apply them in your life. I highly recommend listening to the podcast that explains some of these tweets in details.