Dancing with the Trend

Volatility and The World's Greatest Investor

by Greg Morris

I've written before about the cost of volatility, both financially and emotionally, and in light of the volatility we saw in 2018, now is a good time to revisit that issue (while it is not an issue).  In 2018, after many sizable down moves, then prices bounced up and then the spin from the investment world was that everything was okay. But let's look at the real world for a moment.  This is part of two pieces I wrote many years ago BS (Before Stockcharts.com) and is somewhat appropriate for today. First of all, consider the market mavens and Read More 

Dancing with the Trend

RISK

by Greg Morris

Dictionary.com says:  Risk is the exposure to the chance of injury or loss; a hazard or dangerous chance.  American Heritage Dictionary says: Risk is the possibility of suffering harm or loss; danger.  These are just two of the many entries and these were just for the noun.  Risk in the world of investments and finance is more succinct.  Risk is the uncertainty of outcome; however, risk can be quantified whereas uncertainty cannot.  Many use risk as a quantitative measure and uncertainty for measuring the non-quantitative type.  This article will attempt Read More 

Dancing with the Trend

Relative Performance

by Greg Morris

First of all, you cannot retire on relative performance.  Relative performance is often a valuable tool, but is also a marketing concept dreamed up by financial pundits who rarely outperform the market.  Table A is a table of various asset classes and their relative performance since 2009, with the last 3 columns being the last 3 months.  Keep in mind that each column (year) is totally independent of the other columns, and the assets classes at the top performed better than those at the bottom of each column.  You do not know if they both lost money, both made money Read More