FMD Capital Management

Posts Tagged: investor psychology

The Investments Change But The Psychology Remains The Same

Written by David Fabian, December 10th, 2017

The deluge of investment mania surrounding crypto currencies and Bitcoin in particular is unlike anything I have seen throughout my investment career.  Having not managed money through the dot-com bubble, it’s difficult to compare this period to any real-world experience on my part.  Many are jumping to conclusions that this new digital currency is going to revolutionize the world.  Others are comparing it to a disillusioned craze that will only benefit a tiny minority and end badly for most.  Read more

What A Time To Be Alive

Written by David Fabian, October 12th, 2017

This morning I saw the graphic below posted on social media as a marketing tool for the new Schwab 1000 Index ETF (SCHK).  The intent of this message is to point out the advantageous expense ratio of SCHK in relation to its competition.  The fund charges just 5 basis points per year to own the 1,000 largest stocks in the United States. Read more

Marrying Active and Passive Management

Written by David Fabian, October 03rd, 2017

One of the latest stories making the rounds on social media is that Warren Buffett is willing to wager (once again) that an index fund can beat active management over a 10-year time horizon.  Buffett made this bet with a prominent hedge fund manager nearly a decade ago with the proceeds going to a charity of the winners choosing.  He handily beat his first opponent and now another contender wants to take a shot at “The Oracle of Omaha”.  Read the complete post here on CNBC for all the details on this potential match-up.    Read more

Everyone Is A Trader

Written by David Fabian, August 16th, 2017

The notorious website Zerohedge has a thought-provoking tagline that reads: “On a long enough timeline the survival rate for everyone drops to zero.”  There’s plenty of truth to that sentiment and drives the philosophical underpinnings of their news and/or investment opinions.   I’m not promoting their outlook, but I will take my own thinking down a similar track and add that:

“On a long enough timeline, everyone is a trader.” Read more

There Are Two Ways To Beat The Market

Written by David Fabian, July 29th, 2017

Active investors are continually looking for innovative ways to beat the market.  They want to believe that some perfect combination of fundamental or technical indicators will lead to the holy grail of outperformance (otherwise known as alpha).

In the broadest sense, there are two ways to beat the market: on the upside or on the downside.  You either take more risk or less than the benchmark. Read more