loader from loading.io

29 - "All Else Equal" Mental Model (Ceteris paribus)

The DIY Investing Podcast: Value Investing | Fundamental Analysis | Mental Models | Business Management

Release Date: 06/02/2019

64 - Rebalancing Kills Compounding show art 64 - Rebalancing Kills Compounding

The DIY Investing Podcast: Value Investing | Fundamental Analysis | Mental Models | Business Management

Rebalancing is an often mentioned tactic utilized in modern portfolios but seldom is it examined from first principles. If you rebalance away from the compounding asset, then you will counteract the powerful effects of compound interest.

info_outline
63 - Your Portfolio should reflect your Investing Strategy show art 63 - Your Portfolio should reflect your Investing Strategy

The DIY Investing Podcast: Value Investing | Fundamental Analysis | Mental Models | Business Management

Portfolio management is a critical means by which an investor implements their investing strategy. Align your portfolio and stock selection with your chosen strategy.

info_outline
62 - Passive Asset Allocation Strategy with Value Stock Geek show art 62 - Passive Asset Allocation Strategy with Value Stock Geek

The DIY Investing Podcast: Value Investing | Fundamental Analysis | Mental Models | Business Management

In this episode, we discuss how to leverage the insights of value investing when building a passive asset allocation strategy. The portfolio and principles discussed focus on investing factors that improve performance over time.

info_outline
61 - How to leverage your equity portfolio without margin show art 61 - How to leverage your equity portfolio without margin

The DIY Investing Podcast: Value Investing | Fundamental Analysis | Mental Models | Business Management

Over the long-term, you will maximize your investment returns if you can somehow use other people’s money to invest. Debt leverage allows you to access other people’s money for your personal benefit. Yet, margin debt is a bad idea.

info_outline
60 - Opportunities are Rare: Go the Extra Mile show art 60 - Opportunities are Rare: Go the Extra Mile

The DIY Investing Podcast: Value Investing | Fundamental Analysis | Mental Models | Business Management

In this episode, I discuss how investors can sometimes fail by not seizing available opportunities. When an investment opportunity meets your requirements you should go the extra mile if needed to make the investment.

info_outline
59 - How to manage Currency Risk (Loss of Purchasing Power Parity) show art 59 - How to manage Currency Risk (Loss of Purchasing Power Parity)

The DIY Investing Podcast: Value Investing | Fundamental Analysis | Mental Models | Business Management

One potential risk of earning an acceptable return is for your investment returns to be eroded by changes in the value of foreign currency. You can limit this risk by avoiding countries with large problems that may impact the currency.

info_outline
58 - Investing Goals for 2020 show art 58 - Investing Goals for 2020

The DIY Investing Podcast: Value Investing | Fundamental Analysis | Mental Models | Business Management

The key to becoming a better investor is to focus on improving your investing process. In this episode, I discuss my 2020 Investing Goals.

info_outline
57 - Technical Analysis for Value Investors with David Keller show art 57 - Technical Analysis for Value Investors with David Keller

The DIY Investing Podcast: Value Investing | Fundamental Analysis | Mental Models | Business Management

Technical analysis quantifies investor behavior. Value investors can leverage charts to improve their investing process. Behavioral Finance is also critical to reducing investing mistakes.

info_outline
56 - HemaCare 100-Bagger with Dan Schum show art 56 - HemaCare 100-Bagger with Dan Schum

The DIY Investing Podcast: Value Investing | Fundamental Analysis | Mental Models | Business Management

In this episode, I interview Dan Schum of NoNameStocks.com

info_outline
55 - How to manage Inflation Risk (Loss of Purchasing Power) show art 55 - How to manage Inflation Risk (Loss of Purchasing Power)

The DIY Investing Podcast: Value Investing | Fundamental Analysis | Mental Models | Business Management

In today's low inflation environment, one of your best opportunities is to find and invest in companies that will thrive when high inflation returns. When the rest of the market gets hammered, your investments would be safe.

info_outline
 
More Episodes

Please review and rate the podcast

If you enjoyed this podcast and found it helpful, please consider leaving me a review. Your feedback helps me to improve the podcast and grow the show's audience. 

Support the Podcast on Patreon

This is a podcast supported by listeners like you. If you’d like to support this podcast and help me to continue creating great investing content, please consider becoming a Patron at DIYInvesting.org/Patron.

You can find out more information by listening to episode 11 of this podcast. 

"All Else Equal" Mental Model or Ceteris Paribus - Show Outline

The full show notes for this episode are available at https://www.diyinvesting.org/Episode29

Background of Ceteris Paribus Mental Model

  • Often a tool used in economic theory
  • Especially used for explaining concepts such as supply and demand

'All Else Equal' Mental Model applied to Personal Finance

  • Increased income is better than lower income
  • Lower expenses are better than higher expenses
  • The longer you live, the more wealth you'll build

Application to Investing

  • The All Else Equal Mental model can be applied to investing to create Investing First Principles

Next Episodes: A series on First Principles of Investing

  • Uses what learned in this episode and combines it with Episode 9 where we first introduced the concept of First Principles. 

References: