Chroma Investing

Value Investing for beginning & small time investors and the value investing strategies of Graham & Klarman

Caution ahead – Seth Klarman’s worried

I just reread this May interview that Jason Zwieg did with Seth Klarman the hedge fund manager of Baupost Group. I have been spending a lot of time pondering fat tail risks and worse case scenario investing. Mr. Klarman’ s view more eloquently encapsulate some of my own views so I will simply include the […]

Is Wealth Destruction Inevitable?

This posting is really a follow up to a thoughtful response I received from Parker Bohn, one of my readers, to my post Worse Case Scenario Investing. Here is his part of his comment, “…I’ve been thinking about the nature of exponential growth and disasters. Let’s say that after inflation and taxes, you could in […]

Worse Case Scenario Investing

I have just finished  reading a book that has forced me to reconsider how I evaluate risk , because it discuss investing in a worse case scenario. Evaluating risk has been an ongoing interest of mine because I assert that understanding risk is crucial to making sound investments.  If you overlook an element of risk […]

Understanding Investing Risk

What is investment risk? Wikipedia says there are two types of investment riskless and risky. I will start by disagreeing. It is a subject I have written about before in Does a Risk Free Rate Exist? My answer to the posed question is no.

Simoleon Sense interviews James Montier

My friend Miguel at Simoleon Sense has conducted another one of his terrific interviews. This time it is with James Montier, who is always someone worth listening to. I have written previously about Montier’s perspectives before. You can check out Montier bitch slaps EFH or Good Decisions, Bad Outcomes. He hails from the behavioral Finance camp, which it is safe to say, the right team to be on.

Does a Risk Free Rate Really Exist?

I was perusing Musings on the Markets, Damodaran’s blog and came across a post entitled Thoughts on the Risk Free Rate. Perhaps, because I am not an academic, I usually reject ideas that seem contrary to logic or that seem designed for an academic and not practical use. The Risk Free rate is one of these notions.

Investing Risks – What is Risk?

Looking at the risks of an investment is vital to understanding whether or not it is a sound investment. In a speech Alice Schroeder, author of Snowball, said that Warren Buffett starts his examination of a potential company by looking at the risks involved. If the risk is too high, he won’t go any further. We would be wise to follow this example.

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