The Kelly Criterion or Kelly’s formula is about minimizing losses and maximize your gains through efficient diversification. The Kelly Criterion is one of many models that can be used to help investors & traders with a diversified strategy. There is a maxim applied to investing; don’t put all your eggs in one basket. So Kelly’s formula helps to derive a diversification strategy. Put simply, it is used by...
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The Junk bond attraction could make sparks fly, bearing in mind that the high-risk high reward nature of the high-risk debt market makes junk bonds attractive. All the stars are aligning for a junk bond attraction that could be like none other. Investors have been building up cash position in anticipation of a market correction and the end of the credit cycle. Indeed, the Fed, the world’s central bank by default is showing no...
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Trumponomics and Trump’s “America First” rhetoric originates from the Beggar thy neighbor policies of the classic 18th century Scottish economist and philosopher Adam Smith, the father of modern economics. So Trumponomics is the 21st-century version of the Adam Smith’s beggar thy neighbor policies which came about as a policy solution to domestic depression and high levels of unemployment. What then is the crux of...
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Technical analysis works 70% of the time, according to Jeff Gundlach chief investment officer of Los Angeles-based DoubleLine Capital. Few top investors will admit to using technical analysis but Jeff Gundlach a respected investor said that he relies on technical analysis under certain conditions. So when will technical analysis works 70% of the time? Here is the zinger, “It works when the market’s resistance and support levels are...
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