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Island Investing

Riffs, rants, and the upside of investing from way off Wall Street


Category: Island Investing

Island Investing: Risk, Take Two

My column in today’s Keys Weekly. Q. How should I think about risk when investing in stocks? A. Risk is a highly theoretical, strongly debated topic when it comes to investing. I wrote a partially tongue-in-cheek answer to this question last fall, but I’ll try again without the lame humor. When it comes to investing […]

Island Investing: Focused Portfolios

Q. How many stocks should I own? A. I’d like to clarify two points for new readers. The first is that I believe that the majority of long-term investors are best served by investing in an index fund – a widely diversified, passively managed fund built just to match the performance of the whole stock […]

Island Investing: The Math of Value Investing

Q. Why do you say value investing is the best way to pick stocks? A. I believe value investing is the only rational way to invest. Some analytical ability is required, but investing intelligently is not nearly as difficult as Wall Street would like you to believe. There’s a central concept behind value investing that […]

Island Investing: Now Almost Reaching Cuba

After a break for the holidays and the recent IIM annual meeting, my Island Investing column is back in the KeysWeekly. It’s now being published throughout the Lower Keys and Key West, too. The article below was in today’s paper. Hello again, island investors! I’m happy to say my column is back on a regular […]

Island Investing: Mind Games

Q. How can I tell if I’m about to make a mistake when investing? A. The most important thing you can do when buying individual stocks is to have a systematic approach you believe in and use consistently. Another way to avoid mistakes is by understanding investors’ common psychological biases. Here’s an example: Together a […]

Island Investing: The Declining Dollar

Q. Why is the dollar declining, and what does that actually mean? A. The value of the U.S. dollar affects everything from the stock market to gas prices to geopolitics. The dollar’s value is determined by its exchange rate, which compares our currency to that of other countries through open market trading. I will leave […]

Island Investing: Private Equity

Q. What is a private equity fund? A. Private equity is the modern name given to firms that in the 1980s and early 90s used to be called leveraged buyout funds, or LBOs. After a slew of companies bought by these funds went bankrupt, however, these firms adopted a more benign sounding label. Don’t let […]

Island Investing: On Dividends

Q. How much do dividends matter? A. While some research indicates that dividend stocks outperform the market, those studies are by definition backward-looking and far from practical. Academic research is often intellectually interesting but practically useless when creating a pragmatic investing strategy of your own. Instead of relying on studies, let’s think like a business […]

Island Investing: Bank Regulators

My column in today’s KeysWeekly: Q. Who regulates the banks? A. Banks are not simply assigned a regulator, as you might expect. Instead, they pick their own regulators through a process informally known as regulatory arbitrage. In essence, banks shop around to find the best outfit to oversee them. You may also find it ironic […]

Island Investing: Market Direction

Q. Which way is the market headed? A. My answer to this question is going to look similar to the answer I gave a few weeks ago regarding whether or not the recession is over. More specifically – in the short-term, I have no idea. That said, neither do the “experts” you see on television […]