Book of Wise Investors

The initial reactions to earthquakes and damages by earthquakes have always been some percentage drops in the country stock market and does not really affect economy and financial markets of other countries. 29 April 2011 mark the 25th anniversary of the Chernobyl nuclear disaster. 25 years after the worse disastrous nuclear accident in history, humanity has yet to devise a permanent solution to the energy crisis. The Japanese Fukushima nuclear incident holds many lessons from social, economic, financial to environmental for us.

Economic and Financial Lessons

Earthquakes happening within a geographic region of a country seldom have significant effects on…

From time to time, one often sees some make money from forex trading seminars (or options trading), with headlines claiming to enable you to make some 5 figures per month simply by staying at home and spend your life watching the forex screen and make 5 figures per month. I have some opinions regarding forex and options trading markets, and application of efficient market hypothesis in this aspect.

An efficient market is a market for which time, effort and money expended to exploit pricing inefficiency are unlikely to produce the benefits of producing excess returns consistently.

The classic $20 bill…

When you invest in anything other than the savings accounts and fixed deposits, the annual returns usually changes from positive to negative from year to year. To measure the success of any investment strategy over the years or some other time periods chosen, one will need to measure the average annual return (or other time periods), and see of it is a significant positive number to decide whether the strategy is working well as expected. However, due to how the annual return is calculate in the first place, one cannot simply find out what is the average annual return from…

For almost every field of studies, from engineering to businesses, there exists the need for acquiring some basic concepts to apply them in suitable situations for that field. In the field of investing and asset allocation, there is no exception also. The following concepts are required to know if one were to manage own portfolio of assets better, detailed mathematical operations of calculating them will be beyond the scope of this blog post or that they are easily available by the links referenced below. While it is a fact that when it comes to Warren Buffett value investing…

When it comes to investing, knowing how to measure and what to measure is needed in order to know how well you do and whether the specific actions taken leads to desired results and if no, why not. While it is a fact that past performance does not equal future results, that is a pretty common saying in finance literature anyway, ordinary investors can nevertheless gain insights, subsequently derive expectations that can be reasonably achieved, so as to build sound and effective portfolios from wise analysis and study of various assets’ historical rates of return data that is available publicly…