When Genius Failed: The Rise and Collapse of Long-Term Capital Management by Roger Lowenstein Long-Term Capital Management’s demise comes from a mix of how their perfect models quantify risks in an uncertain world, a sense of infallibility, 30 to 1 leverage, illiquid trades, and basic greed. It is like betting on the outcome of a […]
How do we attain wisdom? It starts with knowledge. What kind of knowledge should we acquire? Peter Kaufman’s three buckets of knowledge can guide us. “Every statistician knows that a large, relevant sample size is their best friend. What are the three largest, most relevant sample sizes for identifying universal principles? Bucket number one is […]
Hunting Groundhʌntɪŋ ɡraʊnd/nouna place likely to be a fruitful source of something desired or sought. Imagine if you’re going on a fishing trip, what do you need? You need a location, fishing rods, reels, lures, etc. That’s the plan. But a plan doesn’t equal success. You might catch some fish if you’re lucky, but you’re […]
There is a story where a toll bridge at Delhi is always congested during rush hour. Therefore, the officials decided to keep it toll-free between 8 to 10 am and 5 to 7 pm to ease the traffic. What they didn’t expect is drivers arriving 30 mins before the toll-free period started queuing up in […]
Failure to execute, or knowing what we should do yet fail to do so is one of the biggest challenges for long-term investors. We all have our fair share of regretful experience doing things as a result of short-term temptation. How can we have more self-control? These are the two ways that might work for […]