Thoughts and musings from my desk to you.

Predictably Irrational Investing

The field of economics has long assumed that people make decisions that optimize their own utility, and to derive the greatest benefit for themselves. However, psychological studies show that we humans do not do this, but rather we often make irrational choices, and we do so predictably. In this case, irrational investing choices.

Don't Overvalue Dividends

Gil published a piece in Advisor Perspectives entitled "Don’t Overvalue Dividends."

“My advisory firm is a big fan of stocks that pay dividends. Segment’s tax-efficient rising dividend portfolio is our most popular strategy. But if you dig into the numbers, the dividends our holdings pay are not huge. This is because we manage for total return, not maximum cash flow.

We buy stocks with a mind toward dividend sustainability and a history of payment hikes. This contrasts with normal bias toward dividend shopping, where one would simply buy the highest-yielding companies as though nothing else mattered.”

Investing is All About Perspective

As investors attempt to navigate choppy waters, we often come to realize how difficult it is to predict the future. Most tend to project today into tomorrow and more dangerously, we tend to act today based on what we feel about tomorrow.

Smart Money? Maybe. Brilliant Money. Never.

Like all industries, there is a pecking order in the investment arena, a hierarchy if you will. At the top of the financial pyramid are the hedge fund and private equity businesses.

Investor Trendspotting

One of the greatest misconceptions investors have embedded in their psyche is the assumption that predictions about the future are accurate or even valuable. I struggle with it too.

Hedge Funds' Comeuppance

Hedge fund managers are far and away the wealthiest and most powerful operators on Wall Street. This is despite producing some of the worst overall results for investors.