Destruction of value
Investing

Destruction of Value

About ten years ago, I attended an investment conference that brought together students and faculty from a number of MBA programs on the East Coast. Eugene Fama was one of the keynote speakers at the event. This was a few years before he won […]

Stock market - top secret
Stock Market

How To Hack The Stock Market

Want to learn a guaranteed way to never, ever lose money in the stock market? Then today’s post is for you. Those who have read about the magic money machine will remember this graph: It’s a good representation of the random walk the stock […]

Stock Market

I Told You So

Back in late February (which now feels like a lifetime ago), a colleague and I were chatting about the stock market. The S&P had just gone down through the 3,000 mark. The said colleague, who happens to be a very thoughtful person, mentioned that […]

Stock Market

A Magic Money Making Machine

If one were to distill the most contentious question in stock market investing, it would boil down to this: “What is a reasonable expectation for stock market returns going forward?” Your take on the question above impacts a multitude of things. First and foremost, […]

Investing

Back In Action

You may have noticed that as of last week, we are back to regularly scheduled, twice-weekly programming here at Banker On Fire. Two weeks in Spain flew by. It wasn’t a relaxing holiday by a stretch – a toddler, an infant, and a stream […]

Stock market fear
Stock Market

How Bad Can A Stock Market Downturn Get?

Not too long ago, one of my readers posed an interesting question in the comments section of this blog. Essentially, it boiled down to this: I am using the stock market for long-term wealth building and my goal would be to FIRE, hopefully, within […]

Loving Active Investors
Investing

Falling In Love With Active Investing

In the personal finance community, you will struggle to find a set of people more vehemently disliked than active money managers. Yours truly certainly shares the sentiment. There are exceptions, of course. Star managers who haven’t (yet) fallen from grace. The rare species who […]

Smarter than the stock market
Investing

Who Is Smarter Than The Stock Market?

“Objects in the rear-view mirror may appear closer than they are”. Right now, the opposite is true. It feels like a lifetime ago – but it has only been 11 weeks since we were trying to find a way forward in the midst of […]

Investing

The Future Is Tech… Or Is It?

One possible explanation for the recent divergence in stock market performance vis-à-vis the broader economy is the performance of the tech sector. Microsoft, Apple, Amazon, Alphabet, and Facebook now comprise ~22% of the S&P 500 index. It’s no wonder that the stock market held […]

Stock market returns demystified
Stock Market

Demystifying Stock Market Returns

The stock market is a complex beast. This is not entirely surprising. In a way, it might even be expected. After all, it’s a mechanism that allows retail investors like you and I take a tiny ownership stake in large multinational corporations like Microsoft […]

People who beat the stock market
Investing

The People Who Beat The Stock Market

The biggest refrain you hear from people who think you can beat the stock market goes as follows: “By definition, 50% of investors do better than the market and the other 50% do worse. Surely it cannot be so hard to be in the […]

Oil Price
Investing

Doom, Gloom, And Negative Oil Prices

For anyone who is following the financial markets these days, Monday was an eye-opener. For the first time in history, the price of oil has gone into negative territory. At its nadir, a barrel of WTI (West Texas Intermediate, the US benchmark for oil) […]

Stock Market

The Hidden Dangers Of Dividend Investing

I was scrolling through my Twitter feed the other day when I stumbled a tweet extolling the virtues of dividend investing – and the investing superpowers of dividend investors themselves. I won’t quote it verbatim, but it had all the requisite components, such as: […]

Hate the stock market
Stock Market

Five Reasons To Hate The Stock Market

The stock market expansion that followed the financial crisis became known as the most hated bull market ever. Despite the tremendous growth and wealth creation, the share of retail investors in the stock market has actually declined from ~65% before the financial crisis to […]

What happens next?
Stock Market

What Happens Next

It’s official. We’ve gone from what seemed like a nasty, yet temporary wobble in the markets to a full-blown crisis. The true scale of the damage to the world economy is unknown so far, but it’s clear the situation is more complex than it […]

Always be learning
Personal Development

Learning From The Best

When it comes to financial self-education, you can hardly do worse than spend one hour a year reading Warren Buffett’s annual letter to Berkshire’s shareholders. Informative, entertaining and thought-provoking, Buffett’s letters are a far better source of information and advice than 99% of the […]

Staring into the abyss
Stock Market

The Art Of Staring Into The Abyss

As I write this post, my stock app is flashing green all around. S&P is up almost 4.6%, which apparently is its 11th best showing ever.  Stocks, mutual funds and ETFs are up across the board. The only exception is the VIX.  Down about […]

Stock Market

The Case For A 100% US Equity Portfolio

At some point, all stock market investors are faced with a question: what is the right portfolio allocation between US and international equities? As the data below shows, at the turn of the 20th century, the US stock market represented ~15% of the world’s […]

Hard truths that will knock you out
Stock Market

The Not So Silly Things Active Investors Say

Not too long ago, I published the “Silly Things Active Stock Market Investors Say” post.   In it, I recounted some of the most popular excuses explanations people make when they try to justify an active investment strategy. As expected, few of the popular excuses […]