From The Crawling Road Blog - The Permanent Portfolio Discussion and More

H/T to Tao6 for sending in this video link on human behavior as it relates to investing: Behavioral economics is a very interesting field. It explores how humans make decisions about money and how their decision making (and emotions) can affect their investing performance. Since I’ve been [...]

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From The Crawling Road Blog - The Permanent Portfolio Discussion and More

A particular theme you'll hear on this blog about investing is the idea that the markets are not predictable. You may believe that I'm referring to the idea that you can't predict returns on investments ahead of time. That's partially true. The other part though relates to extreme risks that sweep through the markets in unpredictable ways with unpredictable results. Aside from standard market risks, when you look at your investments it's also important to always ask yourself: "What if I'm wrong?" Because, odds are, you will be wrong eventually. It's just a question of degrees on how wrong it will be: A little or a lot.

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From The Crawling Road Blog - The Permanent Portfolio Discussion and More

Formerly, I was in the Internet security field and one of my jobs was actually to break into computer networks for a living as well as doing network attack tool development. So it comes naturally to me to look for ways in which something may not go according to plan and deliberately push further it until it breaks in unexpected ways. Therefore, as my research in investing and economics widened, I thought it would be an interesting exercise to depart from looking at optimistic scenarios and instead look at financial disasters.

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