Leverage

Leverage

Leverage is a powerful tool in both investing and trading, allowing individuals and institutions to amplify their potential returns by borrowing money or using other financial instruments. When used wisely, leverage can significantly enhance profits. However, it also...
Bayes Reasoning

Bayes Reasoning

Bayes’ reasoning is a powerful tool for decision-making under uncertainty. It’s used not just in statistics but also in various fields like medicine, artificial intelligence, economics, and investing. The crux of Bayes’ reasoning is updating your prior beliefs...
Market Timing

Market Timing

Investing in the stock market can be an exciting and daunting task. One of the most debated strategies within the world of investing is market timing – an approach where investors try to predict future market movements in order to buy before prices rise and sell...
Biases

Biases

This post on biases is structured into 3 parts: Part 1: Understanding Biases and Their Impact on Decision-Making Part 2: Individual Biases That Lead to Bad Financial Decisions Part 3: How Biases Influence Financial and Investment Decisions   Part 1: Understanding...
Risk Premia Harvesting

Risk Premia Harvesting

If Investors want to earn expected returns higher than the riskless rate, the most reliable way is to bear risks that markets reward with a premium. A less reliable way is to pursue active management, in which successful investors (skillful or lucky) reap gains at the...