What You Can Learn From The Pile-on Effect

What You Can Learn From The Pile-on Effect

When I say a lot of news is already known to a select group of people, I'm including official news. Just as there are typically signs when a stock is going to make a big move—indications in the form of daily volume, directional bias, and relative action (i.e., the stock versus the stock of rivals or indexes that cover the industry)—there are also signs when a big media piece could be brewing.

Keep reading →

Different Types of Risk in Investing

Different Types of Risk in Investing

Risk is what we take the moment our eyes open in the morning. There is a chance the water in the shower could be too cold or too hot; the former makes for a jarring wake-up call, the latter makes for a possible visit to the hospital.

But of course we have knobs that clearly indicate hot and cold, and we also have to ability to feel the water, testing for the moment it reaches perfection.

As the day moves forward the risk increases exponentially. We, however, moderate our lives to adjust for risk. If that nut in the car in front of you looks like he has had too much to drink, you simply switch lanes and move around him, maybe giving him a dirty look as you pass by. You continuously check and assess risk when you drive your car, looking at the rearview mirror every few seconds.

Keep reading →