Common Sense and Investing
Preface: Second post and I'm already off topic according to my subtitle. I do have another post that is more topic appropriate but it's been pretty hectic so I haven't had time to finish it. Although, investing is definitely a kind of technical topic involving data and numbers, so one could argue it is still on topic. And argue I shall! Enjoy!
A lot of smart people I meet frequently mention that they have no clue about investing or other related financial matters. They're quite right that modern finance can get complicated really fast such as option pricing models (that require differential equations and other such complicated maths) but as in most things though, a little common sense goes a long way. So I want to share an analogy that I think will help people understand a rational way to invest i.e. value investing. In particular, the discussion will be geared towards investing in publicly traded stocks but the general idea applies to most asset classes.