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 […]
If you watch a lot of CNBC or read a fair amount of financial news you will no doubt have heard of the VIX Volatility Index, also known as the ‘fear index’. What is the Vix Index? The VIX is actually the ticker symbol for the CBOE (Chicago Board Options Exchange) Market Volatility Index future and […]
I never recommend trading off tips. It doesn’t matter whether it’s your next door neighbour or Warren Buffett, if someone tells you to buy a stock you should always do your homework first before you put any of your own money on the line.