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, syst... Read more
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... Read more
There are two different methods for reasoning, inductive and deductive. While deductive reasoning looks for certainties, inductive reasoning is used when a circumstance is seen as supplying evidence that a conclusion could be true. The belief in... Read more
The Dunning–Kruger effect is a cognitive bias identified in the world of psychology. This effect is identified when people believe their intelligence and knowledge is adequate and correct when in reality they are ignorant and inexperienced in th... Read more
Confirmation bias is a psychological filter that causes people to interpret information in a way that proves or at least confirms what they believe is true or what they believe will happen in the future. Confirmation bias is a kind of mental bia... Read more
Warren Buffett has said “I just sit in my office and read all day.” The Omaha World-Herald reported: “Eventually finding and reading productive material became second nature [to Buffett], a habit. As he began his investing career, he would... Read more
Peter Lynch was one of the greatest mutual fund managers of all time for returns over a long period of time. He was the manager of the Fidelity Magellan Fund from 1977 to 1990. During his time managing the fund he averaged a +29.2% return annual... Read more
The Pareto Principle is named after Vilfredo Pareto an Italian economist who first noticed an 80/20 distribution in statistics and published his first work on this in 1896. Pareto is said to have first observed the mathematical formula when he o... Read more
Game Theory was originally an idea of John von Neumann based on the strategy and equilibrium in two person zero sum games and its proof was the Brouwer fixed-point theorem which has become a standard method in game theory and mathematical econo... Read more
The CAN SLIM Investing System was created by William J. O’Neil after his study of the biggest winning stocks in the history of the stock market going back 130 years. He wanted to systematically quantify the the traits both fundamentally an... Read more
