How to Remain Detached from the Stock Market and Treat Your Investments Like Private Businesses When I was much younger, I kept seeing Benjamin Graham’s famous allegory called Mr. Market mentioned by great economists, investors, and financial historians. I bought a copy of The Intelligent Investor to figure out why everyone was so enthralled with a book…
One of the things that helped me build wealth early in my career is the realization that there is no “stock market”. Instead, there are individual businesses and individual investors who own those businesses. From time to time, a business owner may want to increase or decrease his ownership in a company so he approaches…
I am working on my What is a mutual fund? category at About.com and a thought struck me. I wanted to go back and look at the most recent investing lifetime (the 50 year period between 1960 and 2010). I imagined that an investor could have bought the S&P 500 stock market index (obviously you can’t…
The media is making a big deal out of the recent stock market drops, acting as if we were living through some sort of new paradigm where stock collapses are unheard of and Wall Street rips off small investors. The past 200 years have been a fantastic time to be a long-term value investor despite some…
In 1928, Irving Fisher published The Money Illusion (seriously, buy it – it’s only $7.95), which discussed the human fallacy of thinking about things in the nominal currency of your home country instead of in terms of purchasing power. The concept phrase “money illusion” was coined by legendary investor and economist John Maynard Keynes. The…
I love Apple’s products and what Apple has accomplished over the past few years. However, it is amazing to see how little even journalists understand the way companies or valued or how to properly compare the total return generated by one business over a given period of time to another business.
