Why is it that great companies don’t always make great investments? This is a conundrum that’s long puzzled investors because it so clearly flies in the face of intuition. Indeed, today’s market leaders—companies like Apple, Amazon and Microsoft—are impressive businesses, and their stocks have [...]
Navigating an Investment Minefield
Investors Raj Rajaratnam and Joel Greenblatt share a number of similarities. They’re almost exactly the same age. They both received business degrees from the University of Pennsylvania, and they both started well known hedge funds. But the differences may end there. During the 10 years that [...]
How to Build a Portfolio
Suppose you wanted to construct an investment portfolio as simply as possible. What would it look like? Many argue that for stock market exposure you could go with just a single fund: one tracking the S&P 500 Index. Among the benefits, the S&P index offers broad diversification and tax [...]
The Virtue of a (Financial) Barbell
In 1987, Nassim Nicholas Taleb was a trader on Wall Street. But unlike most of his peers, Taleb wasn’t pinning his hopes on a market rally. Instead, he had positioned himself to benefit from a market meltdown. On October 19 of that year, just such an event occurred. For no apparent reason—in the [...]
Apple, Tesla, Nvidia and your portfolio
What drives stock prices? It comes down to five factors, I believe. We can look at each of them in turn. The first two factors are a company’s observable strengths and weaknesses. Consider Apple. Its strengths are easily quantifiable. In the United States, it’s captured more than half the [...]
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