A right of passage for anyone studying investing and finance in university is to face the beat down of learning one of core investing theories which is the Efficient Market Hypothesis (EMH). It is a particularly dry topic which I recall on several occasions made me almost fall asleep in class. In school they basically ram the EMH into your brain and I really wasn't in any place to know if it was a good thing. You just accept it and move on. Over time though, I grew more suspect of this model especially after seeing people like Warren Buffet and Peter Lynch basically thumb their nose at it and had a bank account to prove it. Over time also I've become a proponent of behavioural finance theories having a greater impact in how we make investing decisions. Another variant of the EMH has emerged, called the Adaptive Market Hypothesis, which integrates a behavioural component to the discussion. In this episode I examine both Hypothesis and offer my takes on the pro's and cons of each.
The move by Amazon to buy Whole Foods is a game changer deal on so many levels. In this Amazon, Aman offers his takes on the deal and how it can shake up the entire retail sector along with how he is framing his investment decisions in his own portfolios going forward.
A lot of times in investing, opportunities and times for action don’t happen on schedule. They just happen and you have to be ready to execute. That is the great benefit of having an investment ideology and The List of companies you’ve done your homework on and are ready to buy if the price is attractive enough and the fundamentals of the business haven’t changed from when you were evaluating the company. In this episode Aman reviews his recent investment decisions.
It's interesting to note that as stock markets in the US set record high's on a daily basis that when you dig deeper, most of the gains in the market are being driven by a handful of stocks. This episode of Stock Talk skews heavily into some academic research side and I use the term "skew" purposely as some old research has re-emerged and has shed some light on another factor that makes it hard to outperform the overall stock market.
No video for this episode!
Since I started doing Stock Talk in podcast and video forms, I've noticed something. It appears the most popular episodes are the one's where I've shared responses that I've offered to people that have sent me questions or responses that I've given in personal finance and investing groups. The great thing is these questions are not really that personal and I feel many, many people can benefit and learn from. It appears you feel the same way! So I plan to do more of these type of podcasts in the future. Here's my latest edition where I answer questions ranging from "What is an SEC 10-K Report?" to "What are the fundamental skills for investing in stocks?" to finally "How does investing in stocks work?". These are amazing, elegant, and powerful questions form a important foundation for investing.
Our journey to achieving important financial goals like retirement or buying a house have traditionally been long treks. In recent years we've been seeing more people who aren't interesting running that marathon but would prefer to sprint to the finish line and achieve FIRE (Financial Independence Retire Early) or other personal finance goals like paying off their mortgage in 5 years, or engaging in multi-year spending moratoriums. These types of extreme personal finance behaviours make great copy and get a lot of clicks and attention. They also create emotional feelings no different than someone who feels inadequate or has a bad body image because of images the media projects on us what norms we should be aspiring to do. In this episode, Aman offers some takes on this type of personal finance "porn" can while inspiring, can give most people a feeling of bad "personal finance image".
Another edition where I share my thought processes that went into my most recent investment decisions. It's one thing for me to teach people how to invest. It's another to model the behaviour. In this episode Aman shares his thought process that went into his decision to buy an ETF and his decision to sell a stock.
As stock markets continue to set records, at times almost on a daily basis, some people who have been sitting on the sidelines are starting to wonder if they should buy stocks now before the train leaves the station. People are grappling with a bad case of FOMO (Fear of Missing Out). FOMO is kryptonite for investors, and can skew us to make emotional investment decisions which could hurt our savings. In this episode, Aman talks about what happens when we get FOMO'ed as investors and what we can do to avoid this behaviour.
The financial services industry has been taking a hit lately. With admissions by former staff of pressures by management to meet aggressive sales targets, up-sell customers, and create accounts without customer consent, it hasn't been good run even though they continue to crank out massive profits. The reality is despite these transgressions, banks are not going away. Financial advisers or advisors are not going away. As investors we will need to co-exist with them. In this episode, Aman walks through some strategies that we can take to become more street smart when dealing financial advisers of all stripes and get the outcomes we need to help us meet our financial goals.
There's been a lot of angst and worry and hysteria thanks to the newly elected Mad King and his minions. You won't find any of that on Wall Street these days. Every is awesome! Aman shares some of the current psychology that is pervading the trading floors and counters of Wall Street.
Since I've been posting the podcast version of Stock Talk, I've been getting a lot more questions about investing and some pretty damn good ones so I thought I would share a couple with you as they capture some pretty important investing concepts that we all need to make sure we've got lined up before we embark on our investing journey. One questions comes from an 18 year old who asked, "What kinds of stocks should an 18 year old invest in?" The other question was, "What will be the best investment for the next 10-20 years?" Pretty good huh? Well I take my best shot in answering them
This episode is a bit of a catch-up episode in that I touch base on a variety of interesting behavioural investing observations, starting with my own recent investment decisions and layering on some observations on how easily we can be swayed to take investment decisions that we really have no business taking. Finally I touch on a recent trend in the investing space where professionals are adding a little Zen to their investment decision making process.
I thought I would take a break from talking about robo advisers, but I discovered something in my robo portfolio that I couldn't put off sharing with you. One of the key value propositions of robo advisers is they stay disciplined to keeping your portfolio diversified across different types of stocks and bonds. When certain parts of the portfolio stray away from their allocations and increase or decrease significantly, the robo computer would rebalance via buying and selling the appropriate Exchange Traded Funds (ETF's). Earlier this week I happened to be checking on my portfolio and was taken aback about how the portfolio was looking. In this episode I share what I discovered about how my robo portfolio looks now.
This episode is a replay of the webinar I delivered on finding your right investing path. I've delivered this presentation many times and it's one of my favourite and one of the most important. Many times I get asked, "Aman, I have $5000 or $10,000 or $50,000 and I want to invest it. What stocks or bonds or ETF's should I buy?" People are looking for the quick answer and solution. Unfortunately investing doesn't work that way. Investing is very much a marathon not a sprint. In order to make the right investing decisions and answer the question above, you need to first make sure you are on the right investing path as there are numerous ones available to all of us. In this webinar I walk you through these investing paths and help you try to figure out how to select the right path that is compatible with your personal circumstances. I also share some important principles and competencies that successful investors have developed that are important no matter what path you select.
In this episode, Aman provides some interesting updates from his previous episode where he was critiqued by a blogger regarding his use of questions as it pertains to the performance of his robo portfolio. It's also an episode of firsts as Aman presents his first book report since Grade 3. One of his goals this year is to read some of the personal finance books that have been piling up in his house. Aman's book report is on the book, Victory Lap Retirement, written by Mike Drak and Jonathan Chevreau.
A couple of episodes ago I talked about my latest update on my Robo portfolio that I setup a couple of years ago. People seem to be interested in my observations about my experience using a Robo Adviser. One of the main reasons I setup an account was to see if these types of portfolios perform any better than traditional portfolios. I asked the question does this type of business model make money for investors? Until recently, most online wealth management firms did not want to go there and disclose the performance of their online portfolios. So in my own small way I've been trying to answer this question. Suffice to say, some people seem to find my questions "strange". A blogger recently posted that I'm asking the wrong investing question in that performance shouldn't play a factor in investing. In this episode Aman offers a response to this post as well as further reinforce why there are no bad questions in investing.
In this episode, Aman reviews his recent investment decisions in January. It was a tough month with many different dynamics in play that forced Aman to make some tough decisions, however, the month provided Aman with an opportunity to practice and reinforce his discipline in managing losses, a skill set that investors do not practice enough as we tend to focus on finding profitable investments.
The recent proclamation by the Donald (aka The Mad King) and his Wall Street minions of the desire to jump into a Hot Tub Time Machine and go back to 1999, a time where financial regulation was unfettered is a call to action for investors. Aman shares his thoughts on how the Financial Crisis became his A-Ha moment for starting his investment coaching practice and how we can take proactive steps to ensure we don't repeat the same mistakes of yesterday.
When I teach and mentor people how to buy and sell stocks and ETF's, the learnings revolve around understanding what makes stock prices go up and down. I teach people how to read and interpret financial statements, assess risk, valuation, developing an investment decision framework, learning and managing our emotions. These are core pillars to framing an investment decision. There is also one other very important factor that can drive stock prices and for the most part we ignore it and take it often for granted. Given the events of the past few weeks, this factor has become has now entered the discussion.
Josh Brown of the Reformed Broker blog, wrote a fantastic piece called Stock Markets and the Rule of Law which reintroduces us...all of to the importance that the rule of law has in how business functions. In this episode I weigh with my own thoughts about this and how it has made take pause in how I am currently framing my own personal investment decisions.