With some of my best performing stocks being emerging market plays, I got to think about the question of …Continue reading “Thought on Emerging Markets; and playing (Russian) roulette?”
Category: Portfolio Management
Portfolio construction (part 1)
I struggle to decide on position sizes and wanted to formalize the process for some time. This is part one that ends with a conclusion I am eager to build on.Continue reading “Portfolio construction (part 1)”
A General Risk Framework
According to academia, the cost of equity can be calculated using the CAPM, a central model to modern financial theory. But even Damodaran critizes this as a statistical approach usually considered too narrowly. Damodaran tends to and recommends to think about business risk in a more general sense first, without applying sophisticated and data-heavy statistical methods (which might have its place).Continue reading “A General Risk Framework”
The Importance of Position Sizing and Trade Execution Rules – Have You thought enough about it?
Risk management needs strict rules. To limit potential harm from our emotions, errors and bad luck, the introduction and adherence to specific position limits and execution rules are very important. I am going to discuss some rules you might find useful below …Continue reading “The Importance of Position Sizing and Trade Execution Rules – Have You thought enough about it?”
What is ‘Averaging Down’ and when you should (not) do it?
When we like to buy a security at current prices, we should love it at lower prices and buy more accordingly. This thinking has some merit and is called averaging down. But it is not without risks…Continue reading “What is ‘Averaging Down’ and when you should (not) do it?”