Lessons for Building a Winning Portfolio 6 pdf

... high-octane Manhattan Fund. Unfortunately for Tsai, just at that point, he was struck with a fatal case of chimpanzee syndrome. The years 1 966 –1 967 were mediocre for Manhattan and in 1 968 , the patient ... “best” managers produce returns that are easily explained by the laws of chance. Are we in Randomovia yet? Almost. If we actually were in Randomovia, we would find that above-aver...

Ngày tải lên: 20/06/2014, 20:20

... financial and economic data to forecast market direction. If we have learned any- thing over the past 70 years from the likes of Cowles, Fama, Graham, and Harvey, it’s that this is a fool’s errand. ... company that at all times maintains an invento- ry of the stock or bond, to allow for smooth trading. In many cases, the broker is acting as an “agent,” which means that he and his company...

Ngày tải lên: 20/06/2014, 20:20

... and foremost, because it provides an intuitive way to think about the value of a security. A stock or bond is not an abstract piece of paper that has a randomly fluctuating value; it is a claim ... rate ofincrease of earningsand dividends across a wide rangeofvalues. This is not true of standard “arith- metic” plots. With asemiloggraph,aconstant growthrate produces aplot that moves...

Ngày tải lên: 21/06/2014, 12:20

... gravitational equation from a falling apple and Darwin’s extrapolating the theory of evolution from observ- ing gardeners and farmers select for favorable plant characteristics are two spectacular ... should have a firm asset allocation pol- icy in place. What separates the professional from the amateur are two things: First, the knowledge that brutal bear markets are a fact of life a...

Ngày tải lên: 21/06/2014, 12:20

... formeris finan- cially healthyand universallyadmired, withlegendary management, a steadily growing stream of earnings, and a hugepileof cash on hand for emergencies. The latterisasick puppy, having ... by 2 .66 % per year. During the past 31 years, the small-stock advantage in Japan has been 1.78%. Abroad, as in the U.S. small stocks were riskier. Once again, the relationship between ri...

Ngày tải lên: 20/06/2014, 20:20

... the case of companies that are buying back their shares. A company that has grown its earnings by 5% per year and annually buys back 5% of its outstanding shares will appreciate by 10% per year, ... observers, and unfortu- nately, this is eventually what happened. Third, and most important, the real beauty of the above formulas is that they can be rearranged to calculate the market’s expect...

Ngày tải lên: 20/06/2014, 20:20

... value each year as capital gains. Fortunately, there are now “tax-efficient” index funds designed for taxable accounts, which are generally able to avoid capital gains. In 1999, Vanguard created ... unnecessary capital gains and resultant taxes. For the taxable investor, indexing means never having to pay the tax and investment consequences of a bad manager. Why Can’t I Just Buy and Hol...

Ngày tải lên: 20/06/2014, 20:20

... requirements are immaterial. For example, if you havesaved a largeamount forretirementand do not plan to leavealarge estate for 114 The Four Pillars of Investing Table 4-1. 1901–2000, 100-Year Annualized ... large stocks. Small companies tend to be insubstantial and fragile. More importantly, they are thinly traded—relatively few shares change hands during an average day, and in a gen...

Ngày tải lên: 20/06/2014, 20:20

... the roads and public safety made travel a danger- ous, slow, and extremely uncomfortable endeavor. At a stroke, the railroads made overland travel cheap, safe, rapid, and relatively comfortable. ... financial chaos of Paris arrived a most extraordinary Scotsman: John Law. After escaping the hangman for killing a man in a 169 4 duel, he studied the banking system in Amsterdam and e...

Ngày tải lên: 20/06/2014, 20:20

... gravitational equation from a falling apple and Darwin’s extrapolating the theory of evolution from observ- ing gardeners and farmers select for favorable plant characteristics are two spectacular ... should have a firm asset allocation pol- icy in place. What separates the professional from the amateur are two things: First, the knowledge that brutal bear markets are a fact of life a...

Ngày tải lên: 20/06/2014, 20:20