I want to tell you about one of the most counterintuitive ideas in all of investing, an idea so strange that when I first encountered it, I spent about an hour with a spreadsheet trying to convince myself it was wrong before I finally accepted that it was right. It is called Shannon’s Demon. And […]
Shannon’s Demon Explained: Why Rebalancing Beats Buy-and-Hold Over Time Read More »
Most investors spend enormous effort deciding which stocks to buy and almost no effort deciding how much to buy. That is exactly backwards. In the long run, position sizing will have as much impact on your returns as stock selection and it will have more impact on your survival as an investor. I use the
Full Kelly vs. Fractional Kelly: Which Position Sizing Approach Is Right for You? Read More »
The efficient market hypothesis holds that all available information is already reflected in stock prices, making it impossible to consistently beat the market through fundamental analysis. It is an elegant theory. It is also, as decades of empirical evidence now demonstrate, substantially incomplete. Certain return patterns called anomalies because they should not exist in a
Market Anomalies That Persist: Why Value, Size, and Low Volatility Still Work Read More »
It’s easy to let a portfolio drift. Stocks rise, bonds fall, and before you know it, your carefully planned allocation quietly morphs into something riskier than you ever intended. Most investors don’t notice until the next bear market hits.This is where William Bernstein’s 5/25 Rule steps in. it is a remarkably simple framework designed to
You’ve heard it before: “cut your losses and let your winners run.” But most investors can’t explain why that rule works. Beneath it lies a deeper logic, born from probability theory and refined by gamblers, traders, and long-term value investors alike. In this article I talk about two competing philosophies, Martingale and Anti-Martingale, and then
You’re told to rebalance your portfolio to manage risk. Keep that 60/40 allocation. Sleep better at night. But that’s just the surface. What most investors miss is that rebalancing doesn’t just reduce risk. Done right, it can increase returns. Yes, rebalancing your investment portfolio can actually make you richer. The secret lies in something few
When Rebalancing Makes You Richer: The Rebalancing Bonus Explained Read More »
Intrinsic value is not enough in a world of macro uncertainty You can do everything right as a value investor. Buy below intrinsic value. Demand a margin of safety. Stick to your thesis. And still, your portfolio can suffer when inflation spikes, interest rates lurch, or trade wars disrupt entire sectors. The truth is, intrinsic
How to Build Portfolio Resilience When Macro Shocks Destroy Valuations Read More »
The market may be irrational, but your portfolio doesn’t have to be. Most investors are just hoping for the best in every market cycle. You, on the other hand, can engineer a portfolio that adapts, hedges, and outperforms. This article shows you how to build a dynamic, globally diversified factor-based portfolio, using real ETFs like
How to Build a Factor Based Portfolio That Outperforms in Every Market Cycle Read More »
Most investors think the Kelly Criterion belongs on the blackjack table or in some Ivy League quant’s toolkit. They assume it’s a mathematical toy, not something a grounded, long-term value investor should take seriously. That’s a mistake. Because when used correctly, Kelly sizing can sharpen your capital allocation like a scalpel. In my own small-cap
The Kelly Criterion Isn’t Just for Gamblers. It’s for Serious Value Investors Read More »
Investors Are Quietly Stepping Off the Beaten Path You’re not imagining it. Traditional 60/40 portfolios are underperforming, and the S&P 500 is increasingly top-heavy with a handful of mega-cap stocks masking broader market fragility. As inflation proves sticky, interest rates remain elevated, and geopolitical tensions disrupt global trade, the case for alternative asset classes has
The 5 Alternative Asset Classes That Could Outperform the S&P 500 This Decade Read More »
