Showing posts from January, 2008

A Perfect Storm

Looking at the STI over the past few trading days, it certainly seems to be a perfect storm with YTD losses of around 8%.

As Buffett has said that "you paid dearly for a cheery concensus", the present gloomy outlook makes me feel intrigued or even slightly excited. It is always wonderful to be able to bargain hunt, waiting for prices to drop lower (at a higher probability than usual). Beats watching the paint dry.

Well, at the end of day, every adversity or losses one endures, one comes out stronger and hopefully wiser.

Book Review: Invest like a Fox, Not like a Hedgehog

Invest like a Fox, Not like a Hedgehog, by Robert C. Carlson, tries to convince its readers that one should be like a fox (multi-facet, multi-perspective) and not like a hedgehog (sole perspective) in investing.

Personally, I feel that this book is pitched for those people who either understand finance theory or have read Peter Berstein's books (Capital Ideas and Capital Ideas Evolving). Even with the background understanding, it may be a struggle to fully understand what the Robert is conveying. This is because the book touches on a wide range of topics which includes CAPM, Modern Portfolio Theory, Valuation Cycle, Behavioural Finance, Complexity and Chaos Theory, Hedge Funds Strategies & Portable Alpha etc. And not to worry, the book sticks to the principle of having no maths equations.

Some ideas that are found in the book:
1) Hedgehog strategy may not work. For example, an all-equity portfolio or 60/40 equity/bond portfolio may fail in certain circumstances, especially if the…