As you might guess, my favorite episode of Seinfeld was one titled “The Stock Tip.” It starts with a conversation between George and Jerry. “My friend Simons knows this guy Wilkenson,” George says. “He made a fortune in the stock market. Now he’s got this new thing.” George goes on to explain that [...]
Many improbable things
Aristotle wrote that, “it is a part of probability that many improbable things will happen.” Investors certainly understand this reality. For better or worse, we know that the market has frequent ups and downs. On average, the S&P 500 has dropped 10% or more approximately every 18 months. And it [...]
Margin of safety
The concept of “a margin of safety” has deep roots in the history of finance, going back at least to Benjamin Graham’s Security Analysis, first published in 1934. The idea is that an investor should never be too confident in any analysis and should leave the door open to the possibility that the [...]
Risk
I’ll acknowledge that today’s topic isn’t the most upbeat one. I want to talk about risk—and specifically, some of the underappreciated risks related to retirement. In thinking about risk, the hardest part, in my view, is that it defies a single definition. Because of that, there is no uniform [...]
