Sublime

There’s nothing wrong with investing in the entrepreneurs of the world, as long as you know what you’re getting into. A profitability matrix can help you separate your long shots from your core holdings.

In Bayesland, when two people pass each other by and find that they have different forecasts, they are obliged to do one of two things. The first option is to come to a consensus and revise their forecasts to match. If my sandwich board says that Nadal has a 30 percent chance to win Wimbledon, and yours says that he has a 50 percent chance instead,

Burton Malkiel’s wonderful book A Random Walk Down Wall Street. Malkiel’s central idea is that a stock’s price incorporates all the available knowledge about the value of the company and the best predictions about the future of the stock.

Some theorists have proposed that we should think of the stock market as constituting two processes in one.98 There is the signal track, the stock market of the 1950s that we read about in textbooks. This is the market that prevails in the long run, with investors making relatively few trades, and prices well tied down to fundamentals. It helps inv

An idea exists in finance that seems innocent but has done incalculable damage. It’s the notion that assets have one rational price in a world where investors have different goals and time horizons.

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