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Bits & Pieces

This section contains 'raw' information and materials which are rather loosely related to investment performance analysis.

"Aoccdrnig to a rscheearch at Cmabrigde Uinervtisy, it deosn't mttaer in waht oredr the ltteers in a wrod are, the olny iprmoetnt tihng is taht the frist and lsat ltteer be at the rghit pclae.ÊThe rset can be a total mses and you can sitll raed it wouthit porbelm. Tihs is bcuseae the huamn mnid deos not raed ervey lteter by istlef, but the wrod as a wlohe. Fcuknig amzanig huh?"

"The only thing that goes up in a bear market is correlation"
"It ain't what you don't know that gets you into trouble, iIt's what you know for sure that just ain't so" (unkown)
"An astonishing fifty percent of our portfolios have outperformed the other half!" (Dogbert, www.dilbert.com)

"Fear is stronger than greed. Risky assets fall faster than they rise." (unkown)
"If you $100'000 debt, then you have a problem. If you have $100 millions debt, then your bank has a problem. If you habe $100 billion debt, then your central bank has a problem". (unknown)
"Amateurs built the Ark. Professionals built the Titanic." (unknown)
"If you can't convince them, confuse them." (unkown)
"So who still believes markets don't work? Apparently it is only the North Koreans, the Cubans and the active managers.", Rex A. Sinquefield in "Active vs. Passive Management"
"Any good scam depends on the greed of the victim" (unknown)
"One of the best ways to make money is not to lose it" (unknown)
"The best way to double your money is to fold it and put it back in your wallet" (unknown)
"The mathematician is perfect only in so far as he is a perfect being, in so far as he perceives the beauty of truth, only then will his work be thorough, transparent, comprehensive, pure, clear, attractive and even elegant." (Johann Wolfgang von Goethe)
"War is purgatory for investors"
"When risk managers are right, they'll always let you know thei're entirely right. When wrong, RMs will only let know they're mostly right." (unkown)
"If in trouble, double" (trader wisdom)
"Buy on the rumours sell on the news" (more trader wisdom)

When using computers to crunch numbers, some non-trivial accuracy issues are involved. For a scary example, have a look at this...
Microsoft Excel contains a rather powerful tool called Solver, which can perform all sorts of optimization tasks (minimizing portfolio risk given some timer series and weight restrictions, for example). If you don't have Solver in your 'Tools' menu, then add it with Tools | Add-Ins... | Choose 'Solver Add-In'. You can download a worked example demonstrating return maximization, volatility minimization and Sharpe ratio maximization here.

"Fast cash. Minimal work. No risk" - ttp://www.wemarket4u.net/sundaestation/ (hint: click one of the links to the left to see what this website is really all about)