GMU-Classical Investing

The Emotional Investor

By |2016-11-17T16:16:45-04:00June 24th, 2015|Categories: Classical Investing, Global Market Update|Tags: , , |

By Douglas Tengdin, CFA How do you feel about investing? On one level, that’s a foolish question. Investments aren’t supposed to be objects of affection. It’s one of the most basic errors to fall in love with a stock. You should never love something that doesn’t love you back. It keeps you from selling when you should; it makes you focus on just one small part of a much larger financial picture; it’s like obsessing on the [...]

The Investment Odyssey

By |2016-11-17T16:21:57-04:00April 10th, 2015|Categories: Classical Investing, Global Market Update|Tags: , , |

Image Source: British Museum Investors face all kinds of temptations. There’s a passage in Book 12 of Homer’s Odyssey that describes the Sirens—beautiful creatures with the faces of girls and the bodies of birds. Their magical song promises knowledge, but it actually lures sailors to their deaths upon the reef surrounding their island. “There is no homecoming for the man who comes upon them unawares,” Odysseus is warned. Before he sails past, Odysseus stops up his crew’s ears [...]

Building For The Future (Part 6)

By |2016-11-17T17:04:09-04:00February 25th, 2013|Categories: Classical Investing, Global Market Update|Tags: , , |

Finishing out your home is a big part of the building process. Setting up electrical outlets, plumbing, heating, flooring and other details will, in many ways, determine how enjoyable it is to live there. Your structure may be sound; your plans perfect; your layout exactly suited to your needs; but if there aren’t enough outlets in the kitchen, or the cable connections are in the wrong place, you’re not going to be happy. […]

Building For The Future (Part 2)

By |2013-02-19T09:59:14-04:00February 19th, 2013|Categories: Classical Investing, Global Market Update|

How do you craft a portfolio?Assembling a financial portfolio is a lot like building a house. Everyone has a basic need for shelter, but once you get beyond the basics there are all kinds of decisions to make—where to locate, how big to make it, what kind of materials to use, and so on. Building a home can be stressful—but it can be exhilarating, too. […]

Big is Beautiful?

By |2013-01-14T09:50:05-04:00January 14th, 2013|Categories: Classical Investing, Global Market Update|

How big should a company be?76 years ago Ronald Coase set out to explain why people organize themselves into businesses, firms, and corporations rather than just freely trade goods and services with one another. If Adam Smith’s “invisible hand” is so efficient, why don’t we all organize ourselves independently. The answer has to do with costs. It’s cheaper to build a firm around one product or service and aggregate the inputs and outputs needed to get the product [...]

The Desolation of Smaug

By |2013-01-07T10:25:28-04:00January 7th, 2013|Categories: Classical Investing, Global Market Update|

What can The Hobbit teach us about central banking?The Hobbit is literature, not a lecture. So when people read the story, they’re looking for entertainment, not edification. Still, like any good story, it has elements that are quite realistic, for all the fact that it is fantasy. Tolkien was quite thorough in thinking through his alternate world. And so aspects of the author’s fantasy-world can be instructive to us in the real-world. […]

An Unexpected Journey

By |2016-11-17T17:06:50-04:00January 3rd, 2013|Categories: Classical Investing, Global Market Update|

What can The Hobbit teach us about investing?Like all literature, the real subject of Tolkien’s Hobbit isn’t the story it sets out to tell. Its subject is human nature, in all its infinite variety. As such, the story has a lot to say to investors, because investing is just another way of addressing our human nature—fear, greed, mania, complacency—where the tally is marked in dollars and cents, rather than in words on a page. […]

Financial (in)Security?

By |2016-11-17T17:11:47-04:00October 15th, 2012|Categories: Classical Investing, Global Market Update|

Financial (in)Security? Is securitization a boon or a bane? Securitization is one of those five-dollar words that gets leaves people scratching their heads. It’s been alternately described as the greatest financial innovation since double-entry accounting or as the worst banking product since the Bombay-based call-center. […]

Buyback Backlash

By |2016-11-17T17:13:51-04:00September 6th, 2012|Categories: Classical Investing, Global Market Update|Tags: , |

Buyback Backlash – What’s happened to Dell? From a business perspective, the answer is easy. They never really made the transition from making desktop computers to laptops, much less tablets. The business model built out of Michael Dell’s dorm room which consisted of assembling boxes with custom components didn’t keep up with the times. So the stock has fallen 80% from its high of $50 / share in March of 2000 to its current price of $10 per [...]