Correlation & the Efficient Frontier
Today I want to discuss correlation within the context of portfolio construction. If you live in a climate where the weather is...
Charitable Contributions – Taxation
Using charitable contributions is generally only valuable from a taxation standpoint if you itemize deductions on your tax return. If...
Stock Buybacks
What are stock buybacks? A stock buyback or a share repurchase decision occurs when a company buys its own stock from the open market....
In it’s simplest conceptual form, stock dilution is basically a company adding more water to a pot of soup, but not adding more ingredients. The company issues new shares of stock in order to raise capital. You own 100 shares of a company. If the company suddenly creates more shares of stock and sells them […]
A market maker is a person or entity that provides liquidity to financial markets by continuously buying and selling a particular asset at publicly quoted prices. They “make a market” by always being ready and willing to trade. They quote two prices A Bid The price at which they are willing to buy a security. […]
My friend Matthew is in the publishing industry. He suggested I write about the word Synecdoche. I have never used this word in a sentence, however, I am interested in English and I am always looking to broaden my vocabulary. And this word is complicated. Now we must define it and relate it to finance. […]
This mainly relates to semantics and only slightly to finance, but perhaps someone will find this of interest. Idioms An idiom is an expression where the meaning of the phrase cannot be understood only from the literal meanings of it’s words. Idioms can be confusing. An idiom has just been born and will grow up […]
Should you choose to trade your limited conscious time for money? Perhaps you should consider the following: Fiat currency is as an infinite resource that attempts to reflect the value of the time a human spent producing a good or providing a service. This dictates the price to acquire said good or service. Perhaps your […]
The law of large numbers describes that as the number of data points in a scenario increases, the average of the outcomes will approach the expected average. Consider a casino with many games. Results will converge to the casino’s advantage because eventually more gamblers will lose than those who win based upon the way the […]
To successfully build wealth, you must make many small calculated decisions over a long period of time. You are growing a garden that will feed you for the rest of your life. You cannot expect the market to immediately provide you abundance. If it appears to do so, it will likely take it away with […]
I was the second youngest cousin in a very large family based in Virginia. I lived in Michigan with my parents as a child. I write this as a memory of a 12 year old boy. My family would travel to Virginia for Christmas, and certain other holidays to a farm outside of the District […]
First of all, if you are only holding assets in IRAs or 401(k)s, this is largely irrelevant and you should stop reading now. If you hold assets in individual accounts or trust accounts, this is something that needs to be understood. Short-term vs Long-term Taxation Short-term capital gains treatment will apply to assets sold after […]
A pure holding company is a business entity that owns a controlling position in other companies. A pure holding company itself does not produce anything. Its purpose is to own shares of other companies and manage those investments on the behalf of shareholders. Control Typically holding companies will own at least 50% of a company […]
