Zweig: Time to Sit Tight — or Tip-Toe into Euro Stocks

While Europe is getting a lot of attention for its debt problems, Wall Street Journal columnist Jason Zweig says the U.S. may be in worse financial condition than many of the so-called “PIIGS” nations. And, he says, rather than running from European equities, it may be time to start snatching them up. According to the International Monetary Fund, Zweig says, the U.S.’s debt is 92.6% of its projected 2010 gross domestic product. While lower than… Read More

What an Inefficient Market Means for Investors

In his latest Wall Street Journal column, Jason Zweig offers an interesting take on the efficient market hypothesis, channeling the late, great Benjamin Graham for guidance. Zweig says that while the stock market may give the most accurate estimate of a stock’s value based on the available information, that doesn’t mean its estimates are right. The reason, he says, involves the two main factors that Graham said go into a security’s price: ‘investment value’ (which… Read More

Avoid “Confirmation Bias”

In his latest Wall Street Journal column, Jason Zweig discusses one of the behavioral pitfalls that can drag down many investors’ portfolios: confirmation bias. What is confirmation bias? “In short,” Zweig explains, “your own mind acts like a compulsive yes-man who echoes whatever you want to believe. … A recent analysis of psychological studies with nearly 8,000 participants concluded that people are twice as likely to seek information that confirms what they already believe as… Read More

J. Zweig & Taleb on Where Investors Go Wrong

Consuelo Mack has two very interesting interviews on WealthTrack this week, talking investing and psychology with both Wall Street Journal columnist Jason Zweig and Black Swan author Nassim Taleb. Zweig, author of Your Money and Your Brain, delves into the way human investors are impacted by a number of psychological phenomena that cause them to buy high and/or sell low, and gives tips for how you can overcome those roadblocks. Taleb, meanwhile, explains why he… Read More

Beating the Timing Temptation

As Liz Ann Sonders notes in the posting below, a lot of investors are now wondering whether it’s too late to jump into the market, or, for those who have been in the market during the rally, whether it’s time to cash out. As Sonders says, such all or nothing decisions are very dangerous — and The Stingy Investor’s Norm Rothery has laid out some excellent reasons why. In an article titled “Tempting Temptation” (originally… Read More

Siegel Fires Back on Long-Term Data

Last month, we highlighted Wall Street Journal columnist Jason Zweig’s criticism of the long-term stock return data that Jeremy Siegel has used in his book, Stocks for the Long Run. Zweig said that the data Siegel used for 1802-1870 was “rotten with methodological flaws”, saying it was cherry-picked, filled with survivorship bias, and included an estimated dividend yield that was likely too high. The criticism was big news — Siegel’s book is something of a… Read More

Zweig vs. Siegel on Long-Term Return Data

The Wall Street Journal’s Jason Zweig is taking Jeremy Siegel to task for the data Siegel uses in his Stocks for the Long Run, an often quoted resource for buy-and-hold investors. Siegel’s book tracks stock returns back more than 200 years, to 1802, and shows how stocks have shown a remarkable tendency to revert back to real (after-inflation) returns of 7% annually throughout those two-plus centuries. But, writes Zweig, “There is just one problem with… Read More

Zweig: WWGD? (What Would Graham Do?)

Writing sixty years to the day after Benjamin Graham’s classic The Intelligent Investor was published, Jason Zweig says that Graham would be cautious amid a market like this one. “Today the market seems to be in just the kind of mood that would have worried Mr. Graham: a jittery optimism, an insecure and almost desperate need to believe that the worst is over,” writes Zweig, whose commentary accompanied the 2003 version of Graham’s famous book.… Read More

How Your Brain Can Drag You Down — and How You Can Overcome It

Nature vs. nurture — it’s an eternal debate, and, as Jason Zweig shows in his most recent Wall Street Journal column, scientific research shows it’s a question that can have a great deal of impact on your investment style and decisions. Zweig writes that he recently volunteered as a guinea pig in Dr. Ahmad Hariri’s lab at the University of Pittsburgh, undergoing several different DNA analyses and brain scans. Hariri’s tests measure a variety of… Read More

J. Zweig on Forecasting & Black Swans

Jason Zweig unveils some great research in his latest piece for The Wall Street Journal (“Why Market Forecasts Keep Missing The Mark”). With all sorts of pundits making predictions for where the market will head in 2009, Zweig says you should be skeptical of their forecasts — and your own — a notion that I also examine in detail in my new book, The Guru Investor. Says Zweig, “Nearly all of us try forecasting the… Read More