For any young professional, networking is of the upmost importance. From business to academics, your connections will forever offer you widespread knowledge and allow you many "real world" opportunities. However, tracking and maintaining your connections is by no means simple. In fact, if you network correctly, it can be timely and exhausting. Luckily, we have LinkedIn (LNKD) to help us with such a process.
Read More
Creative Destruction
One of the more interesting ideas to come out of economic and business literature is that of “creative destruction,” which is closely related to the concept of “disruptive innovation.” Distilled down to its most basic form, “creative destruction” is the concept that something new, whether a technology, manufacturing process, or business practice, can disrupt the established market and upset the market power of entrenched companies.
Read More
The World Beyond Wall Street
If you have been paying attention to international news over the last few weeks, you are most likely aware that the Middle East is once again heating up. While the civil war in Syria continues to rage, militant Islamic fundamentalists have risen up in Iraq (a group known as ISIS), and are slowly trekking toward Baghdad.
Read More
Minimize Risk, Maximize Return
There is a discernible thrill to picking stocks correctly. Carefully considering risks, weighing possible options, and evaluating every aspect of a company, pulling the trigger, and finally seeing all your hard work pay off is extremely satisfying—and it can be very profitable too. While one must take care to avoid being sucked into the gambler’s paradise of day-trading, there is clearly an important role for the active investor, in value and growth. But there is an obvious catch: consistently successful trading is extremely difficult (read more here).
Read More
The Investor Balancing Act
This week I’ll shift away from the cognitive biases and irrational behavior that affect our decision-making, and instead shift my focus towards one of the most important aspects of investing: portfolio theory. Modern portfolio theory (MPT) focuses on building a portfolio of assets that maximizes the risk-adjusted return—that is, maximizes the expected return of an investment portfolio while minimizing its risk (learn more about how to avoid risk here).
Read More
The Voice Of Reason
Despite being one of the most basic ideas of microeconomics, “sunk costs” are deceptively easy to understand; yet, they lead even the most rational people to make irrational decisions. The basic idea of a sunk cost is quite simple: once a cost has been incurred, it should have no bearing on future decisions (it is “sunk”). The classic example of this phenomenon is the advance purchase of a movie ticket for which one cannot receive a refund.
Read More
Momentum Investing
Technology stocks, once the darlings of Wall Street, are now facing intense investor scrutiny. Over the last three months, key tech stocks, such as Twitter (TWTR), Netflix (NFLX), and Amazon (AMZN), experienced significant declines in their stock prices. Twitter is down more than 44%, Netflix is down nearly 20%, and Amazon is down about 17% (all since March).
Read More