Bill Ackman on Everything You Need To Know About Investing & Finance In 1 Hour

from market folly by (Market Folly)

Pershing Square Capital Management CEO Bill Ackman did a video for Floating University and The Big Think entitled «Everything You Need to Know About Finance and Investing In Under an Hour.»

Yield Curve Signals and the Popular Delusion of the US Long Bond

by Alex Bernal on December 14, 2012

All about the relationship b/w the yield curve and the stock market, in the context of the last decade.

2% Real for a Decade

13 minute interview with Cliff Asness, touching on the expected returns, PE10 etc.

from World Beta — Engineering Targeted Returns and Risk by Mebane Faber

Projected 15-year S&P 500 Returns

from TurnKey Analyst by Wesley R. Gray, Ph.D.

Over the next 15 years you could probably see 2% to 8% CAGRs, and will most likely see something in the range of 5-6% nominal. Rip out some inflation and you’ll notice these aren’t returns to write home about. Of course, relative to the alternatives, a 2-3% real return might be the best think going.

Winners and Losers

from Systematic Relative Strength by Mike Moody

Behaviour finance yet again

…handy graphic from CXO Advisory
that explains how clients use different reference points for winners and losers.  In short, the winners are compared with their highest-ever price, while losers are compared with their break-even purchase price.

 it explains why clients are perpetually disappointed with their advisors—because they are comparing their winners with the highest price achieved.  Any downtick makes it a loser in their eyes.  The losers are ignored, in hopes they will get back to even.

Defining Risk Versus Uncertainty

from The Big Picture by Barry Ritholtz

Consider the distinctions Mauboussin makes:

Risk: We don’t know what is going to happen next, but we do know what the distribution looks like.

Uncertainty: We don’t know what is going to happen next, and we do not know what the possible distribution looks like.

…think of dice or a multiple choice exam — we have risk, but we do NOT have uncertainty

Charlie Munger on the Psychology of Human Misjudgment: Harvard Speech

from market folly by (Market Folly)

Berkshire Hathaway’s Charlie Munger gave a speech at Harvard University back in the 1990’s on the topic of the psychology of human misjudgment.  T2 Partners’ Whitney Tilson was kind enough to transcribe it and we’ve posted up below.

Saturday links: equity arithmetic

from Abnormal Returns by abnormalreturns

A look at the increasingly popular Bayes’ Theorem.  (Farnam Street)

How quitting Twitter for a month changes your thinking.  (Adam Brault)

Barry Ritholtz talks cognitive biases with Michael Covel.  (Trendfollowing)

Investing tips from Hugh Hendry.  (Credit Writedowns)

How to Win at Forecasting

from The Big Picture by Barry Ritholtz

Fascinating discussion over at Edge about the nature of expert judgment and what it means. (It careens into a little HedgeHog and Fox arguments).  This has an enormous relevancy for investors. Here’s the intro, plus a link to the video.

Technical Analysis & Financial Advisors

from The Capital Spectator

More financial advisors are using technical analysis in their money management travels these days, including asset allocation. In the new issue of Financial Advisor, I profile the trend and ask some wealth managers why and how they’re using TA: (Re)Discovering Technical Analysis.

Selected Tweets

Wide-Ranging Interview with Legendary Global Value Investor Jean-Marie Eveillard  ht: @abnormalreturns $$

Global Flows to Mutual vs Bonds — while bonds are becoming riskier and riskier $TLT

RT @LearnBonds: #Gundlach: The Japanese are Out of Options, Buy Japanese Stocks and Short JPY 

Don Yacktman: A fund manager’s faith produces results —  — Readability —

Ray Kurzweil joins Google as director of engineering: Ray Kurzweil, the famed inventor and futurist, said today …

Арабские государства поддержали Россию и Китай в стремлении регулировать интернет —  нашли друг друга…