#4: Beat the Market Pt. 4 - Using a Market Regime Filter, How Will You Measure Your Life?, Cathie Wood, Abandoning value, Pronghorn investing

This week we're releasing Part 4 of A Simple Strategy to Beat the Market (if you haven't done so, read Part 1, Part 2 and Part 3 first).]

Beat the Market (Part 4) - Using a Market Regime Filter to Improve Risk-adjusted Returns

The Basic "Beat the Market" strategy works quite well, but there are some enhancements we can add to improve the risk-adjusted return, i.e. make the ride smoother.

Read Part 4 to learn about market cycles, market regimes, and how we can use a simple market regime to improve the returns of our Beat the Market strategy.

NOTE: This is not financial advice. Results are hypothetical, do not indicate future results, and do not represent returns any investor actually attained. Please read the Disclaimer page for more information.

How Will You Measure Your Life? by Clayton M. Christensen (Success Book Review)

Clayton Christensen (1952-2020) was a Harvard Business School professor and is author of the classic book on management strategy, The Innovator’s Dilemma. But outside the hallowed halls of business schools and chilly corporate boardrooms, Professor Christensen’s most impactful contribution to the rest of us is likely his short book (co-written with James Allworth and Karen Dillon), How Will You Measure Your Life?

It’s a worthwhile read for students, new graduates, parents, everyone really, to help us answer the important questions in life: How do I find a satisfying career? How do I have happy relationships? How do I stay out of jail?

Key Takeaways

  1. When choosing your career, focus on motivation factors (challenging work, recognition, responsibility, personal growth) while maintaining an acceptable level of hygiene factors (status, compensation, job security, work conditions, company policies, supervisory practices).
  2. Be prepared to experiment with different opportunities, adjusting and pivoting until you find the right thing for you. Do not be afraid to make changes.
  3. Your strategy is not what you say it is – it’s shown in how you spend your time, money and energy.
  4. Nurture important relationships in your life even when they’re going well, or they may not be there to support you when you need them.
  5. Find the right experiences to help your children grow and be there for them when they encounter challenges – do not outsource this.
  6. “The only way to avoid the consequences of uncomfortable moral concessions in your life is to never start making them in the first place.”
  7. Figuring out your purpose in life is the most important thing you can learn.

Intrigued? Read the full review and top highlights.

Worthwhile reads

Cathie Wood: A Tech Investor Doing God’s Work (FT - Paywall)

"Wood only struck out on her own in 2014, aged 58, when she founded Ark with her own money. It was a difficult first few years, but she stuck to her investment style, with its emphasis on disruptive companies that could shape the future."

The Man Who Abandoned Value

"You can figure everything out if you just spend enough time and break it down into its simplest component parts. Everything is just an on-and-off switch. Everything is just a pixel of information. Just keep digging, keep taking notes and figuring things out, and see how things work like an engineer. And that’s kind of the way I went at cloud computing."

Invest Like a Pronghorn

"The pronghorn is nearly as fast as a cheetah, capable of reaching 60+ miles per hour. It has the second fastest top speed in the world. But unlike the cheetah it doesn’t get tired in 30 seconds. It’s said it can run at 45 mph for 30 minutes, and finish a marathon in 45 minutes."