Author: Growing your tree of prosperity

With the efforts I have been gaining to show up some misconceptions about investing in local stocks, I would have thought that I should be become by now public enemy number 1 from value investors. Sadly, I have read some attempts to discredit quantitative backtesting and I find that they are either holding back key information, or generally lack intellectual sophistication. As such, I will take on the burden of criticising quantitative backtesting myself. This is because, of all people, I cannot afford to drink my own Kool-aid. Not only could I stand to lose money if my methodology...

In this second installation of The Model Thinker, I will talk about seven uses of models. The author uses the REDCAPE acronym to illustrate these seven uses which I will illustrate here for folks interested in their personal finances : a) Reason – To identify conditions and deduce logical implications One of the best illustrations of this usage is Ray Dalio’s Big Debt Crises he showcases one way to look at how accumulating foreign debt can lead to a depression later on. A detailed discussion of this model, unfortunately, cannot be done on a blog. We do know that...

One advantage of being a Christmas baby is that I get to reflect on the year on Christmas Day so it is possible for me to talk exclusively about the future on New Year’s Day. Instead of resolutions and goals, here are some cautionary statements entering the new year. a) Don’t talk about setting goals until you reviewed the ones you set last year This insight came to me in a group chat with friends last week. One guy was asking about what goals would we set for 2019 to which I then asked him what about the goals...

Since I will be celebrating my 44th birthday tomorrow, it is about the time to check-out what I have set out to do in 2018 and see whether I succeeded in 2018. a) It turns out that predicting the market is a Fool’s Game. Although 2018 has been quite a good year for me, it was quite humbling to see how badly my predictions went. I thought the markets would go up by around 0-5% in 2018 but it dropped by over 10% much to the consternation of everyone in the blogosphere. Even worse, my prediction for crypto-currencies to...

This started because a student felt uncomfortable with the portfolio of REITs selected by one of my better REIT screeners. He examined the list of REITs proposed by the stock screener and said that my portfolio contained REITs with “weak” sponsors. Separately I’ve been told on other occasions that investors should simply invest in REITs with good sponsors. Of course, these conversations seldom delve into how to actually determine what a good REIT sponsor is. I’ve always felt uneasy about investment strategies like this – an intellectually dishonest investor can simply define a REIT sponsor as a good one...