I credit Google for having the foresight to identify threats to its main business of selling advertising against search results. The potential loss of market share in the mobile space led them to the Android acquisition.

Barry Ritholtz

Barry Ritholtz

Profession: Author
Nationality: American

Some suggestions for you :

Active management leads to lots of poor investor behavior. It sends people chasing after whoever has the hot hand at the moment.

The electronics industry expanded rapidly and the seeds for the semiconductor and software revolution were planted. The postwar period also saw the suburbanization of America, the rise of the homeowner, the build-out of the interstate highway system, and the rise of automobile culture. Credit availability expanded dramatically.

Many hedge fund managers have become billionaires; perhaps this - plus their reputations as the smartest guys in the room - is why they have captured the investing public's imagination.

The good news is that economists are intelligent, engaging and often charming folks. The bad news is their work is often of little use to investors.

'Returnless risk' is not how you prepare for a decent retirement.

If you think too-big-to-fail banks are not worthy of investment because of their impossible-to-read balance sheets, well then, don't buy them.

Any time you speak to people about their posture, you learn about their most recent investment activity. When someone just bought stocks, they tend to be bullish; someone who just sold is bearish.

TV producers want ratings and are willing to do nearly anything to get them. They gin up artificial conflicts and create an urgency for even the most minor of economic data points.

If I am going to trash others for their dumb predictions, I must at least hold myself to the same sort of accountability.

The bottom line is this: Cash, in modest increments, has a role in any portfolio. But unless you are Warren Buffett, you should limit it to 2 or 3 percent.

It is important for investors to understand what they do and don't know. Learn to recognize that you cannot possibly know what is going to happen in the future, and any investment plan that is dependent on accurately forecasting where markets will be next year is doomed to failure.

Narrative drives most of economics. Everything seems to be part of a story, and how that story is told often leads to critical error.

Forecasting is simply not a strength of the species; we are much better with tools and narrative storytelling.

No one knows what the top-performing asset class will be next year. Lacking this prescience, your next-best solution is to own all of the classes and rebalance regularly.