About

As an individual investor I have been investing in options and stocks for over 25 years. After getting mauled in the 2000 tech crash, I resolved to pay a lot more attention to the macro forces at work and was able to avoid the worst of the 2008/2009 crash. Now, I am trying to achieve relatively modest returns, while avoiding “buy and hold” strategies that I think are fundamentally flawed.

A couple things I believe:

• The past does not predict the future  (see Nassim Taleb’s “Fooled by Randomness“)
  • This invalidates much technical analysis–although I think the psychology of stock movements is very important
  • Past behavior of assets relative to each other (e.g., bonds vs stocks) does not guarantee future behavior
• Markets fall a lot faster than they go up, typically at least 2X
• “Buy and hold” ensures that you will experience the worst days as well as the best days of the market
• Investing in individual stocks carries many more unknowns than aggregates like index ETFs (e.g., earnings surprises, analyst’s ratings)