2022 was an excellent year for me. OK, I didn’t make as much from my investments as I did in 2020 or 2021—who did?—but a 22% return isn't bad. But more important than how much I earned is how much I learned. Was this a better year than most? I... Continue reading

2022 was an excellent year for me. OK, I didn’t make as much from my investments as I did in 2020 or 2021—who did?—but I made more than I made in 2019. I ended up making a cool million dollars, up 22%. But more important than how much I earned... Continue reading

Spotify playlist: https://open.spotify.com/playlist/0QtFRvge0eXyldeZFxSvO8?si=1fce4f4484264a4e YouTube playlist: https://www.youtube.com/playlist?list=PL4HU4MWMlWQ3eShpGSHPV4izRXwL5oGeN “About Damn Time” by Lizzo. Disco amalgam, fusion, or rip-off? Does it matter? “Alaska” by Camilo x Grupo Firme went to #1 but you wouldn’t know if you didn’t listen to Mexican radio. Thankfully there’s plenty in Chicago. “All That’s Left of Me Is You” by Vulfpeck would be a good song to teach your kids. “Anti-Glory” by Horsegirl is so much better than “Anti-Hero.” A Chicago band gives us the Joy Division tribute of the year. “As It Was” by Harry Styles was inescapable this year, deservedly. “Bad Habit” by Steve Lacy. Do... Continue reading

I've been taking photos in two long-running "albums." The first is called "Nothing to See Here," and consists of black-and-white photos of nothing in particular. This year I took a lot of photos of Bloomington, Indiana for that album. Here are a few: Here are some more photos from that album taken in Chicago's South Side: I've also been taking color photos for a different album called "Through an Open Window" . . . Here are a couple from Chicago. I took some photos in Queretaro, Mexico, for that album, but the camera setting wasn't as high-res as it should... Continue reading

What a strange book! This, Evelyn Waugh’s fourth novel—and a great improvement over the ridiculousness of his first—came well before Brideshead Revisited, his seventh, and seems to have been influenced by Hemingway in its matter-of-factness and brevity, its focus on caprice and its disregard for grief. Tragedies are dismissed, natives are subhuman, characters are built up and carefully delineated only to be extinguished in the most absurd ways. The novel is a series of barely compatible set pieces whose varying lengths put them at odds with each other and frustrate not only the flow of the novel but the ability... Continue reading

I recently performed a study of over fifty different value factors to see which performed the best. (Admittedly, a lot of them are similar.) The results surprised me. Method I conducted the study using a web-based stock research company called Portfolio123. Here’s my methodology. (This gets a bit technical; feel... Continue reading

Joseph Conrad’s short novel (or long tale) The Shadow-Line is, in its way, a coming-of-age story disguised as a dead-man’s-curse story. The unnamed narrator begins callow, uncaring, abominably rude, intolerant, and impatient; he ends up considerate, forbearing, and full of feeling for his fellow men. This transformation goes unnoticed by himself and by most of the men around him, though one man catches on at the end. Conrad was a gripping writer. It’s difficult to pause during one of his books. “The Secret Sharer,” a short story, held me in its cross-hairs. Both tales are about young ship captains facing... Continue reading

Brideshead Revisited’s primary characters are all ruled either by regret over what has been spoiled or hatred of what was once loved, which sometimes amount to the same thing. It’s the story of a man who falls in love with another man and then with his sister, but for Waugh there’s no real sexual difference between them, and he pulls that off with such elan that it’s as if all the sexual differences and identities we’ve been raised with never existed and we could all choose men and women freely. Money is almost as ineffable in the novel: few people... Continue reading

When we trade individual stocks, we incur transaction costs. The purpose of this article is to explain these costs, quantify them, and help you avoid them. First, I’ll classify them into four types: market impact costs; spread costs; getting bad fills; and commissions and taxes. Market Impact The market impact... Continue reading

Did you know that European stocks are easier to profitably trade than North American ones? That seems counterintuitive, doesn’t it? Information about them seems hard to find. Most stock-oriented websites don’t cover them: European stocks are only listed if they have ADR tickers, and frequently there’s nothing written about them.... Continue reading

Jonathan Eig’s Ali is well-researched, compact, clear, balanced, and quite moving. But Muhammad Ali comes across at times as selfish and stupid, a far cry from the hero he appeared to be. Eig is not afraid to point out what Ali didn’t do, what roads he didn’t take, what opportunities he let slip by. One could, perversely, view Ali’s life as a series of bad choices: to leave Malcolm X in favor of Elijah Muhammad, to have Herbert Muhammad and Don King manage his affairs, to have sex with as many women as possible, not to get involved in the... Continue reading

When I invest in a company, I try to look at it from every angle I can. But obviously, some angles are more important than others. In this article I’ll discuss the factors that are most important to me. I’m not really a buy-and-hold investor. I like to buy companies... Continue reading

I found Dostoevsky’s big mess of a novel a delight, despite its numerous flaws, which include a narrator who is sometimes omniscient and sometimes can’t tell what’s going on, preachiness, a central character who is exasperatingly holy in his goodness and innocence, a paucity of visual scene-setting, and preposterous situations; a delight because of how unpredictable the characters are, how much life they have, and how they interact, contradicting themselves all the time. Apparently Dostoevsky himself, while writing, had no idea what his characters would do next, and was continuously surprised by them. The Idiot was Dostoevsky’s favorite of his... Continue reading

This is the fourth and last article in a series; here is the first (on factor design); here is the second (on designing ranking systems); and here is the third (on principles of backtesting). I’ve been using a fundamentals- and ranking-based strategy for stock picking since 2015, and since then... Continue reading

This is the third article in a series; here is the first and here is the second. I've been using a fundamentals- and ranking-based strategy for stock picking since 2015, and since then my compound average growth rate is 48%. So I can attest that a fundamentals-based strategy can really... Continue reading

This is the second article in a series; here is the first. I’ve been using a fundamentals- and ranking-based strategy for stock picking since 2015, and since then my compound average growth rate is 47%. So I can attest that a fundamentals-based strategy can really work. My previous article in... Continue reading

In Henry James’s “The Lesson of the Master,” a choice is given: the satisfaction of intellectual or personal passion. Both cannot ever be satisfied. Intellectual success depends on solitude and deprivation; personal success (marriage, children, money) can only be obtained by sacrificing intellectual success. (Along the way James offers a perfect description of a writer’s room, a room designed to produce writing, though not necessarily good writing: a large, windowless room lined with books, with a glass ceiling and a red rug from the door to the standing desk, along which the writer paces until the mot juste comes, upon... Continue reading

The first two are mid-period Henry James stories narrated by despicable people. The unnamed narrator of “The Path of Duty” is a priggish woman who goes to some length to interfere in an affair in which she has no business, and destroys the happiness of several people in the process. The narrator of “The Aspern Papers” is an unscrupulous biographer who goes to pitiless lengths to get hold of some private papers. Austerlitz is an exceedingly strange novel by W. G. Sebald in which the narrator is vague and confused about what he himself experiences but remembers every word spoken... Continue reading

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(Spotify playlist here; Youtube playlist here.) In alphabetical order: “Atlantic” by the Weather Station. “I should really know better than to read the headlines.” You said it. “Boomerang” by Yebba. Move over, Adele. When it comes to white soul, Yebba has you beat hands down. Plus she’s from Arkansas instead of Tottenham. “Chaise Longue” by Wet Leg. The funniest song of the year. Plus it makes me jump up and down. “The Dress” by Dijon. From a terrific record, Absolutely. To me, he’s the perfect combination of Frank Ocean, Bon Iver, and D’Angelo. “Fuera la liga” by Los 4. Best... Continue reading

I have been using a strictly quantitative process to buy and sell stocks for the last six years, with excellent results: I have a CAGR of 46% over that period, and have made over $3 million. In this series of articles, I’m going to give you a point-by-point method by... Continue reading

Overview Analysts and investors have long puzzled over the difficulties of calculating the cost of equity. The cost of equity is an essential component of the cost of capital, and the cost of capital is essential if we want to know the present value of an investment. In this article,... Continue reading

I recently read seven more Henry James stories (some of them are as long as novels), and I wanted to remark on three of them. “The Siege of London” is one of James’s more perfect productions, detailing the rise of Nancy Beck, or Mrs. Headway, to the British aristocracy. Not quite a prefiguration of Kathleen Winsor’s Forever Amber, it nonetheless offers some of the same thrills—of seeing a low-born and not terribly virtuous woman achieve the highest levels of social status. But it’s more about its heroine’s various adversaries and helpmeets in all their hypocrisy and confusion than about the... Continue reading

Robert Caro’s The Power Broker: Robert Moses and the Fall of New York is a gargantuan biography (over 1300 pages; over 66 hours if you listen to the audiobook, as I did) of a gargantuan man. Robert Moses’s achievements were mind-boggling in their scale and scope, but so was his arrogance, deceit, and contempt. Caro lays out both sides like a lawyer—or an investigative journalist—might, and it’s a damning picture. Rarely is Moses sympathetic; never is he boring. Many parts of the book are tendentious, but Caro makes even the most arcane aspects of urban planning fascinating. I wanted to... Continue reading