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Just my thoughts #0300

The concept of “going concern” in accounting emphasizes that a business must persist into the future to retain its value. This principle signifies that present value already incorporates expectations of future value; thus, a business facing uncertainty about its future will inevitably diminish in present value. It highlights the interconnectedness of present and future values, suggesting that they cannot be regarded in isolation. All stocks traded on the stock market are priced based on their anticipated future value. In essence, we trade on a future that has yet to materialize. Consequently, determining how far into the future to evaluate is a critical factor in making investment decisions. Since individuals have varying skills and perspectives on forecasting the future, selecting an investment strategy must align with one’s attitude toward time. - Joseph’s “just my thoughts”

Just my thoughts #0092

James Simons founded Renaissance Technologies, the leading American hedge fund investor. He was, in fact, a mathematician. The Medallion Fund he ran had also seen a 200-fold increase in Berkshire Hathaway stock yield, matching Warren Buffett's performance. It was an incredible record, plain and simple. This conclusion was a subtraction of 5% of the management fee from the fund as a GP with 44% of the compensation fee. He invested in a cutting-edge "quant system" that trades stocks using sophisticated computer-aided algorithms. To eliminate emotional interference, the finance industry excluded employees. However, they recruited doctors like him from the science and technology fields. Even having extensive financial and investment knowledge, investment is the conclusion of action. Sound judgment beyond feelings is crucial for investment, but feelings are a variable. It's challenging to become wealthy if you don't control your emotions. In other words, emotions are a...

Just my thoughts #0034

In mathematics, a "recursive proposition" is a proposition whose true or false value is fed back into the proposition itself. For example, "I can never allow this to happen before I die!" is a recursive proposition. Unfortunately, the condition for proving that this is possible is that I die. The problem is that you are dead once, you can not be longer the person who gives permission. This phenomenon also occurs in the investment business. The most common example of this is an investment in stocks. This is a recursive proposition because if the price of a stock goes up and you sell it, the sales volume directly affects the price. Therefore, the number of shares (trading volume) is one of the most important factors to be considerable when investing in stocks. This property of recursive propositions is a good explanation for why the large trading of stock volumes is difficult to work. - Joseph’s “just my thoughts”