This is a review of the book ‘The Snowball: Warren Buffett and the Business of Life’ by Alice Schroeder. This book reads like a novel about Warren Buffett. I believe this book is the closest readers will get to Warren Buffett writing an autobiography of his life. He gave the author unprecedented access to his […]
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Net worth is the total value of every asset that an individual owns subtracted by all their liabilities. Net worth can also be calculated for businesses, governments, or countries. To calculate your personal net worth first add up all your personal assets. Value of your personal residence. Value of any rental homes you own. The value of any
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Paul Tudor Jones II was born in Memphis, Tennessee. In 1976 he earned a bachelor’s degree in economics from the University of Virginia. He was accepted to Harvard Business School in the 1980’s but he did not enroll. PTJ was a commodities broker for E. F. Hutton & Co between 1976-1980. PTJ was mentored by cotton trader Eli Tullis. Tullis
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The Calmar Ratio was created by Terry W. Young in 1991, it is short for California Managed Account Reports. The Calmar ratio is usually based on recent and short term data. The Calmar ratio gives investors insight into the risk parameters of different investments and money managers. The Calmar Ratio contrasts the risk of maximum drawdown and the annual
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CAGR stands for ‘compound annual growth rate’ and is used in business, investing, and trading as a term for the measurement as a geometric progression ratio providing a constant rate of return over a specific time period. While CAGR is not an accounting term it is still used to describe the return in segments of
The scientific method is a fact finding method of gathering knowledge that was developed in the 17th century to search for the truth for cause and effect relationships in science. This method requires observing along with skepticism about what is being observed. Cognitive assumptions can be biased and filter how someone interprets information so a filter
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Data mining for traders is the process of researching large amounts of historical data to find repeatable price action patterns in financial markets. Data mining can be done on all different time frames and both technical and fundamental data can be used to analyze the movements of markets based on different catalysts. When you mine
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Stocks are an asset class of investments where you buy a share of ownership in a publicly traded company. Stocks are equity in a company. Shares trade on stock exchanges through market makers and executed for investors through a stock broker. How do you invest in stocks? Decide you want to own stocks. Understand the
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Warren Buffett’s 2014 Cadillac XTS. Warren Buffett is not only one of the richest people in the world but also very frugal to a point that it is very surprising to people. He lives in the same five bedroom house he purchased in 1958 for $31,500. He also has a modest car in comparison to
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Warren Buffett has established himself as being the best investor in history by both becoming the wealthiest person in the world many times over and building one of the biggest companies in the world Berkshire Hathaway out of a failing textile company. What specific investment strategy did Buffett use to create such success and wealth?
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In trading the two terms tactic and strategy are not used enough and when they are used many times they are mixed up. Trading tactics are the actual means that are used to achieve a single specific goal or target, but a trading strategy is the big picture plan that combines many different tactics together to achieve the overall objective of
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In 2001 during a Fortune Magazine interview Warren Buffett said that the stock market capitalization to GDP ratio as a long-term valuation indicator is probably the best single measure of where valuations stand at any given moment. The stock market capitalization to GDP ratio is used to measure if a market is undervalued or overvalued in
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This is a guest post by Jake @TrendSpider. In this weekend’s analysis, we analyze the moves made by SPY, QQQ, and IWM over the last week and beyond. SPY: Daily Chart QQQ: Weekly Chart XBI: Weekly Chart Related Blog Posts Alerts – Add alerts to your trendlines and indicators with sensitivity. Raindrops – Visualize
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The company that Warren Buffett built along with his business partner Charlie Munger is Berkshire Hathaway Inc. Berkshire is a multinational conglomerate holding company that has been run out of its headquarters located on one floor of the Kiewit Plaza building for over 50 years in Omaha, Nebraska in the U.S. Berkshire Hathaway Inc. is a publicly
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The term Antifragile was coined by author Nassim Nicholas Taleb who was also a professional option trader and former hedge fund manager. Taleb created the word ‘anti-fragility’ because the existing words used to describe the opposite of fragility, such as unbreakable and robustness, were not accurate in what he was trying to describe. Antifragile goes beyond these
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This is a guest post by Tino @TradersReality. There have many associations that martial arts have with probably every endeavor in life. The simple reason is that both require discipline. Now you have more than likely read the basics of marital arts is preserving your character, having the discipline not to react when not required,
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The Occam’s razor heuristic was created by William of Ockham who was a philosopher and theologian who preferred simplicity for explanations over unneeded complexity. Occam’s razor is one way to solve problems using the principle that the most obvious answer is the right one and adding complexity in reaching a solution should not be done
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Nassim Nicholas Taleb is a best selling author, philosopher, scholar, and statistician. He had a long career as a professional option trader and hedge fund manager. His expertise was as a risk analyst focusing his work on the problems of outliers and fat tail events of randomness. His books go into depth about the nature of probability
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If you are losing money in the markets or having a large drawdown in capital it could be a good idea to go back and return to first principles. First principles are the core concepts or accepted foundation of beliefs that a theory, process, system, or methodology is based. Profitable trading comes from using the
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Mental models are tools used to explain the process and theory a person uses to understand how something works in the real world. It represents a system of principles that tries to explain the interrelated cause and effect of actions and results. A mental model represents the relation between intuition and reality and beliefs about
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