What man has done, man may do. – Proverb On May 6th, 1954, at Oxford University’s Iffley Road Track, Roger Bannister became the first recorded man in history to run a mile – exactly 5,280 feet – in less than 4 minutes. His time, 3:59:04, was thought unachievable. Men had tried countless times and failed.…
DetailsIn 1928, Irving Fisher published The Money Illusion (seriously, buy it – it’s only $7.95), which discussed the human fallacy of thinking about things in the nominal currency of your home country instead of in terms of purchasing power. The concept phrase “money illusion” was coined by legendary investor and economist John Maynard Keynes. The…
DetailsThe older, more experienced, and wealthier I am, the more I am convinced that the average person has no business managing their own money. People are too busy living their lives and getting ahead in their careers to focus on growing their capital. As a result, they make stupid decisions that cost them enormously in the long-run.
DetailsThe Graham-Newman Corporation was a stock company that essentially served as a hedge fund through which legendary investor Benjamin Graham managed money for his shareholders. It is the same firm where Warren Buffett worked in his twenties before moving back to Omaha and establishing the original seven partnerships upon which his fortune is based. According…
DetailsI found myself in a situation today that illustrated the powerful concept of a specific mental model known as the illusion of choice. This theme, of course, is familiar to anyone who has watched The Matrix trilogy, from the scene wherein the architect explains that the key to keeping humanity subdued is providing a system that presented the illusion of choice.
DetailsI’ve written about Walter Schloss and his value investing philosophy in the past. Tonight, I’m thinking about the lessons someone can glean from studying his career. [mainbodyad]Alice Schroeder tells us on page 852, in the notes of The Snowball, that in 1951, Walter Schloss was making less than the average secretary working for Benjamin Graham…
DetailsI’ve been thinking a lot lately about Buffett Associates, Ltd., which is the most famous and first “real” professional investment partnership that Warren Buffett established on May 1st, 1956 after he returned to Omaha following his time working for Benjamin Graham at the Graham-Newman Corporation. He was 25 at the time (would turn 26 that…
DetailsI’ve been writing quite a bit about dividends and dividend investing over at Investing for Beginners at About.com. One of the things I wanted to explain, but I feel is still advanced for that particular readership base, is something known as the dividend discount model, or rather a back-of-the-envelope adaptation of it. (Please note that…
DetailsI’ve written a lot about the economics of household income over at Investing for Beginners at About.com, a division of The New York Times. [mainbodyad]Most economic data, as I explained there, comes in the form of regular households that are easily understandable to the average worker. For example, to be in the top 5% of household…
DetailsA few days ago, I was reading a psychology study that discussed the difference between the physical brains of men and women and the real-world implications of these differences. [mainbodyad]The best way to summate the data was the example of the assassination of President John F. Kennedy. As he was shot, the typical response of…
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