Have you ever experienced playing with the “house’s money” at a casino? You’re on a hot streak and are willing to take on more risk because you view your winnings as not your money, but the house’s money. Psychologically, it doesn’t feel like it’s yours to lose! The “house money effect,” or “mental accounting”… Read more »
The national debt is now at $27 trillion, or about $190,000 per household. This amounts to nearly 130% of gross domestic product (GDP), the highest level we’ve ever had (debt to GDP reached 112% in World War II, but would soon fall to under 30% in the decades after). Despite this massive amount of… Read more »
The attraction of contrarian investing is that by its very nature, it goes against the crowd. It is the opposite of momentum investing, which not surprisingly, is how most people invest. The only thing momentum investors know about most of the companies they wish to own is that their stock’s price has ascended recently, and… Read more »
Every morning a middle-aged couple walks by my house at precisely 7:15 AM. They don’t miss a day, and they are always on time (you can set your watch to it). Before the pandemic began last March, I had never seen them before. Recently, I’ve begun to wonder: after the pandemic is over, will I… Read more »
Warren Buffett is known as perhaps the greatest stock investor of all-time. By his own account, Buffett spends hours (and days) at a time pouring over 10-K reports and other financial information to understand a company’s business and how much it’s worth. He’s a numbers man, first and foremost. But after reading his latest… Read more »
It’s never too late to teach an old dog new tricks. That is certainly the case with General Motors and Disney, two century-old companies that are now embracing new technologies to completely re-shape their businesses; and Wall Street is beginning to take notice. Let’s start with GM. From the time GM emerged from bankruptcy… Read more »
A hallmark of the recent rally in stocks is a surge in trading by individual (or retail) investors. While to some, this has brought back memories of the dot-com era, we see few similarities overall between then and now. For one, the stocks leading this rally (predominantly the big tech stocks) are hugely profitable. There… Read more »
The best performing stock in the S&P 500 this year was none other than Tesla, up an astounding 660%. Next in line were Etsy (+290%), Nvidia (+117%), L Brands (+115%) and PayPal (+114%). If you missed out on one (or all) of these winners this year, you might be wondering if it’s too late to… Read more »
It wasn’t that long ago that the market fell out of love with the Big Tech IPO. In May of last year, Uber Technologies priced its IPO at the low-end of its expected range, and the shares still fell more than 7% on their first day of trading. The shares then fell by another 30%… Read more »
