When you’re new to investing it can be difficult to separate out the noise from the truth. There is a whole industry out there dedicated to keeping you updated with market events, telling you which stocks to buy, which stocks to dump, and when to do so.
I don’t know why but I was lying in bed last night thinking about confirmation bias in stocks. So I thought I’d write a post about it. See, if you don’t know what confirmation bias is, you might be making all sorts of little mistakes without even knowing it.
The price-to-earnings ratio, or PE ratio, is one of the simplest but most popular financial ratios for estimating the value of a stock. Even though the PE ratio is simple, it’s an amazingly useful tool. In fact, a study by Merrill Lynch found that 33% of professional investment managers consider the PE ratio before investing in a company. […]
Regular readers of this blog will know that I am a fan of quantitative trading methods. I’m not a very good discretionary trader so I get around that fact by using rules to make investment decisions. It pays off since it stops me second-guessing my trades and getting out at precisely the wrong time (which is […]