The Online Investing AI Blog

If you’ve ever visited the department of motor vehicle’s office, or an open bar office Christmas party, you know that the number of jackasses in the world considerably outnumber the rest of humanity.

These are the same people who bought dotcom stocks for thousands of times their net worth and took $700,000 mortgages on homes worth about $200,000 a few years before.

So, that’s bad for investors, right?

Not according to Michael Dever and just some good old common horse sense. You can actually learn how to take advantage of these jackass investors.

Dever, who is Founder, CEO & Director of Research of Brandywine Asset Management, says you can take advantage of jackasses to make money as an investor. In fact, he’s written the book about it. It’s called Jackass Investing: Don’t do it. Profit from it.

The book, which Dever says is the result of a decade of research and three decades of trading experience, teaches some contrarian lessons.

For instance, Dever believes that every decision is a trade–even the decision not to trade. He names that decision the Rush trade, after the rock band.

One difference between investors and jackass investors is whether they know if they’re investing… or gambling.

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Creative Commons--Jerry Bunkers

Welcome to Weekly Wisdom.

I’ll be sharing some links to great stories and articles in a sec, but right now I’d like to pass on my on bit of wisdom.

I just realized that eBooks are becoming more expensive than print books.

Yesterday, I was shopping for eBooks through my Kindle and saw one title I was interested in.

It cost $13.99. Not exactly cheap.

It’s a new title, so there wasn’t a paperback version, but the hardback cost $16.99.

I know what you’re thinking: “You nut, the hardback is still 3 bucks more than the electronic version.”

I though that, too, but the re-sale value is in the $8 range. So, you could get that hardback for $8.99, or 5 bucks cheaper than reading it on your Kindle.

Recently, there have been stories that publishers are pushing for higher prices on e-books. Is this a sign of that? Not sure, but it’s something I will think about as I shop for books.

Here are some other interesting thoughts for the weekend…

THE FUTURE

Nova Spivack – A New Approach to AI: Non-Computational AI

Digg — Researcher Wants to Build Biodegradable Robot

Wired — Technology May Help You Read Your Dog’s Mind

Next Big Future — Michigan Tech Research Using Nanoclays to Make Better Asphalt

Science Blogs — Entangled in the Past: Experimental Delayed-Choice Entanglement Swapping

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Trend Commandments--a new book by Michael Covel

Let me start off by saying that I am a big fan of Michael Covel. I read his blog. I am a Facebook fan. And I’ve read a few of his books. I constantly reference his book on the Turtle Traders.

I was pretty excited to see that he wrote a new book called, “Trend Commandments.”

If you know anything about Covel, you know he’s going to make things interesting. And he doesn’t disappoint.

However, if you thought this was a book that would offer some actionable insights into trend following–which I did–you might find Trend Commandments a little flat.

We’ll start with the good.

Trend Commandments does a good job at providing general reasons why investing in trends makes so much sense.

Covel also shows why trends occur in every market, all the time. If you’ve studied trend investing, this isn’t really a surprise, but for beginners this will be an eye-opening revelation. Most investors have been trained–maybe even brainwashed–into believing that you avoid bear markets. Not so. There are instruments and tactics–like shorting–that can produce profits even in the worst market, especially the worst market. You might counter: isn’t that risky? My answer: if you’re smart, it’s not as risky as letting your dollars die an inflationary death sitting in a bank account.

So, that’s all good, right?

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Bad news on the economic front. The American economy is stalled. Job growth is non-existent.

But thanks to some recent reading on Trend Following, I now realize there’s no such thing as a bad economy. You can make money in any economy. You can save money in any economy. You can also waste money in any economy.

It’s just a matter of keeping connected and continually educating yourself.

So, here’s what I’ve been reading…

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Conservatives, who tend to favor the market, often make the  case that they’re better investors and their policies are better for the economy. Liberals say they’re better investors because they are more globally aware than conservatives. They say they distribute wealth and that’s good for the economy.

So, who is right?

Neither.

To become the complete investor, you have to shrug off all  ideologies. When you trade or invest, ideologies can cloud your judgment.

Here’s how it works:

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Last week I read The Ivy Portfolio by Faber and Richardson. Before I tell you about it, let me share with you one incredible resource.

I found out about the book from an awesome site that you really need to check out: dshort.com. I was so impressed that I immediately added it to the blogroll. What’s so great about it? It is easy to understand, offers outstanding content, and has great charts and graphs. I’ll be writing about it extensively in a future post.

Back to The Ivy Portfolio. It explains how Yale and Harvard endowment funds have outperformed the market and had consistent returns for 23 years (ending in 2008). I think that is pretty useful information. And, thanks to the great writing, you don’t need a Ph.D. in mathematics to understand it. It is actually very easy to understand and replicate the strategies.

How good is outperform? Yale returned an average of 16.6% per year. Harvard did 15.2%. Not bad for such a long period and two major market crashes. What is their secret? Did they have 100 Ph.D.’s working for them?

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While browsing Amazon today, I discovered that they are (pre)selling the Kindle for just $114. It’s a pretty good deal, so I wanted to share it with you right now.

Normally the Kindle is $139, but now you can get one for $114. What’s the catch? Is it refurbished?

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I just found these cool books for free on Amazon, and I wanted to share them with you. They are Kindle books but you don’t need a Kindle to read them – you can read them on your computer, iPhone, Android, etc. Usually these books are only available free for a short time, so be sure to get them right now.

By the way, there are over 880,000 books available for Kindle now, plus 1.8 million public domain books.

The Simple Dollar has pretty good reviews, so I think it is worth checking out. Here’s some info about it:

Trent Hamm found himself drowning in consumer debt, working in a job he couldn’t stand… and figured out how to escape that debt and build the fulfilling career he’d always dreamt about, all at the same time.

Hamm shared his experiences at TheSimpleDollar.com—and built it into one of America’s top personal finance websites. Now, The Simple Dollar is a book: packed with practical tips, tools, and lessons you can use to transform your life, too.

Here’s an interesting book entitled Crapshoot Investing about what happened during the Flash Crash.

The equity markets are now nothing more than high-speed casinos: white-knuckle rollercoaster rides that have left individual investors legitimately terrified of equities. The Flash Crash of May 6, 2010—when the DJIA plummeted 734 points in 17 minutes and dozens of top companies traded as low as zero—was just a harbinger of even greater disasters.

In Crapshoot Investing, Jim McTague, Barron’s Washington Editor, reveals the twin causes of this massive transformation: high-frequency traders using mathematical hocus pocus and blundering regulators whose new rules have massively backfired.

I hope you enjoy them!

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As you know, the world is changing quickly. And, one of the things that needs to change is the way we learn. Many people go to school and assume that traditional school is the only way to learn.  I have written in the past about the shortcomings of a traditional education.

Image courtesy Tulane

Today’s post is about new and better ways to learn. I have been doing that programming stuff for a long time, and it is interesting to see how changes in technology make it easier to learn. eBooks and online videos are a great complement to the old printed book.

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Now I am reading A Kick in the Seat of the Pants by Roger von Oech. It reminds me about the importance of using the infinite power of our minds. Think about it. We spend money on computers and iPods and GPS devices, but we rarely think about getting more out of the most powerful computer available to us: the one between our ears.

A Kick in the Seat of the Pants teaches us how to use our brains more effectively and how to solve difficult problems. It also focuses on how to take an idea and turn it into reality. If there is one critical skill that will help us improve our lives and the world, it might be this one.

How does this book help us get more out of mind?

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