Black Swan

2 Comments

A Month of Seeing Red [view article]
I think your GS Market Portfolio index makes all the sense in the world so to speak. You are adopting David Swensen type approach which has been super successful for Yale Endowment Fund for last 20 years with 16% + annual return average. By the way Vanguards new Managed Payout Funds use a somewhat similar approach and provide a very easy way to invest following Swenson/GS Market type models and theory. See for example VPGFX. Jul 01 02:52 PM
Thornburg's a Huge Bargain After Monday's Crash [view article]
I have been following this blog for a few days, Bought some TMA PRF @ $5.50 and bailed at $4.60. Now @ $3.35. I think Jack and all the other posters are super smart. Unfortunately you are all running various scenarios about TMA that you can nicely fit under a bell curve to support your opinion. Unfortunately TMA ran into a "Black Swan". A "Black Swan" is a highly improbable event that is "unpredictable; carries a massive impact; & after the fact we concoct an explanation that makes it appear less random, and more predicable than it was". See The Black Swan by Nassim Taleb. Going forward I am sorry to say that your opinions about what happens to TMA Monday or thereafter will be worth about as much as mine or your cab driver. TMA is a pure gamble as are most individual stocks. I have my "crazy money" of about 1-2% of my portfolio which I used for the TMA purchase. Other 98% is very broadly indexed. Mar 08 02:44 PM

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