A liquidity ladder: matching savings access with payment dates
How to assign functions to cash balances by timing without turning an example into advice about allocations or products.
196 translated explanations
Financial guides
Each guide explains a mechanism, its assumptions and its limits. Choose a topic or follow a learning path.
Savings
Reserves, deposits, rates, inflation and savings risk.
Amortizing debt: check the balance and payment composition
Read an educational repayment schedule, the equal-payment formula and the composition of interest expense.
Annuity and contribution timing: future value, present value and payment dates
How to value equal payments, compare beginning and end-of-period contributions and understand the limits of a perpetuity model.
Back-solving a savings goal: find the contribution and check the horizon
How to solve the reverse problem when the target, starting amount and available horizon are known.
Bank discount and interest rate: different bases for one cash flow
Why a percentage of future par differs from return on the amount actually advanced.
Budget and paper portfolio: a safe activity with an adult
Use tokens and cards without real trades, personal data, loss penalties or product recommendations.
Continuous compounding: the frequency limit and equivalent rate
Derive the exponential model without confusing the same printed percentage with the same annual growth.
Effective rate: converting periods into a comparable result
How to distinguish a nominal rate from the result of capitalization without treating an annualized figure as a promise of return.
Emergency fund: a reserve for specific disruptions
How to describe unexpected expenses, test reserve access and build an educational replenishment plan.
Future payment: how much to set aside as a single amount today
Bring a personal goal to a present amount without turning a calculation rate into a promise of return.
Household cash calendar: why a positive budget does not prevent a cash gap
Distinguish the monthly surplus from the ability to pay bills on particular dates.
Household-budget stress: fixed commitments, variable spending and resilience
Test a combination of falling income and rising mandatory expenses without presenting a scenario as a forecast.
How deposit interest is actually accrued
Why 12% per year does not mean 12% for every term, and how to check a simple calendar-day scenario.
How to compare deposit terms, not advertised rates
A terms card, comparable cash flows and an early-exit scenario instead of a ranking of current offers.
Inflation and real return: measuring purchasing power
How to compare the growth of an amount with rising prices and avoid treating nominal income as increased purchasing power.
Irregular income: separate monthly revenue from the amount available for living
Build a smoothing cash plan without assuming that average income arrives every month.
Partial periods: days, changing rates and early exit
How to split a term into intervals and distinguish mathematical daily income from the contractual result at closure.
Rates change: build scenarios instead of extending today’s number forever
Check accumulation under different rates by period and separate known terms from assumptions about the future.
Read a financial contract as a map of payments and obligations
Separate parties, package components, promised amounts, contingent payments and exit rules.
Reconciling percentages to the kopeck: precision, rounding and annualization
Find the source of a difference between two calculations without calling every kopeck a bank error.
Regular withdrawals: how long capital lasts and what preserving it means
Distinguish spending principal, nominal preservation and preservation of purchasing power.
Savings risks: safety, access and purchasing power
How to map the risks of holding money and check a product’s legal status without promising complete safety.
Several deposits and withdrawals: build the balance period by period
Build a verifiable timeline and separate personal contributions from earned income.
Simple and compound interest: where the accrual goes
How separate interest payments differ from adding interest to the base for the next calculation, with educational examples.
Sinking fund versus emergency reserve: do not count the same money twice
How to save for a periodic payment while keeping the reserve’s purpose transparent.
The capitalization calendar: from a date to the next day’s base
How to map accruals, payments and balance changes, and explain why equal months can produce different results.
They promise high returns: check the offer before transferring money
How to separate warning signs, legal-entity checks and evidence of real activity.
Who pays the salesperson? Examine conflicts of interest without accusations
How compensation can change recommendations and which questions to ask before deciding.
Financial markets
Instruments, trading infrastructure, settlement and market risk.
Accrued coupon interest: why a bond’s full price differs from its quote
How accrued coupon interest allocates a coupon between holders, where costs arise and why accrued interest is not free profit.
Amortizing bond: building cash flows from the remaining principal
Why principal repayment is not income and how a declining base changes later coupons.
Bond fund and individual bond: whose term ends?
Maturity of an issue is not the return of a fund-unit price; portfolio value, distributions and continuing interest-rate risk must be separated.
Bond interest-rate risk: why price changes while the coupon stays the same
The inverse relationship between price and required yield, the effect of maturity, duration limits and holding-to-maturity risks.
Bonds: cash flow, obligations and non-payment risk
How to read a simple bond, distinguish par from price and check the risks around promised payments.
Broker and dealer: the role in the transaction matters more than the label
Agency execution, principal trading and embedded compensation explained through the trade confirmation.
Buyback: why higher earnings per share is not automatically value creation
A buyback uses company cash; the smaller denominator cannot be analysed apart from changed resources.
Calendar spread: different maturities do not remove risk
How to decompose a calendar futures spread into two maturities, calculate each leg and check delivery, margin and basis movement.
Call and put at expiration: payoff is not profit
Buyer and seller profiles including premium, contract multiplier and asymmetric potential loss.
Chart patterns: from recognition to a testable rule
Define support, breakout or a pattern before seeing the result and test every match, including failures.
Common and preferred shares: compare rights, not names
Treat voting, distribution priority and residual assets as separate terms of the specific share class.
Coupon and yield: why the same rate can produce a different result
The difference between coupon rate, current yield, yield to maturity and the holder’s realized result.
Credit spread: the difference in yields does not equal the probability of default
How to choose a comparable benchmark, count basis points and
Currency exchange and CFDs: the same chart, different rights
Why receiving currency, settling a price difference, counterparty risk and the effect of small margin must not be collapsed into the word “forex”.
Custody chain: why nominal entry does not mean
Owner accounting, cumulative entry and corporate transfer
Default and debt recovery: why one word does not determine the loss
Recovery amount, timing and costs change the result; event probability is not loss given the event.
Depositary receipts: underlying shares, ratio and additional risks
How a receipt relates to an underlying share, what determines payments, and why a convenient trading form does not remove currency or infrastructure risk.
Dividend policy, resolutions and entitlement: not one promise
Separate a profit-distribution policy, a decision for a particular period, the conditions for identifying a recipient and the actual receipt of money.
Duration and convexity: how accurate is a bond’s linear estimate
Measure sensitivity to a small yield shift, calculate a second-order adjustment and understand the limits of one-rate analysis.
Exchange, clearing and settlement: why concluding a trade is not the end
The path from an order to an account entry, the roles of the broker and depositary, the spread, and the difference between a trading event and a settlement event.
Financial history: learn from it without fitting it to today
How to compare historical returns while accounting for payouts, currency, institutions and markets that disappeared, without treating the past as a forecast.
Floating coupon: index, spread and reset delay
How a known formula can leave the future cash payment unknown, and why a floating rate does not remove every risk.
Forwards and futures: the terminal difference does not describe the whole cash path
Individual terms, standardization, interim settlements and counterparty risk compared in two explicitly defined models.
Fund net asset value and exchange price: why they are different numbers
Assets minus liabilities, value per unit, creation of new units and a secondary-market premium without a list of available funds.
Futures and options: obligation, right and leverage risk
The difference between futures and options, collateral and variation margin, buyer and seller loss limits, and hedging limits.
Futures basis: why the futures price differs from the spot price
The sign of the basis, carrying costs and the futures curve do not promise a future move in the underlying asset.
Hedging: which risk is offset and which risk remains
Match the underlying flow and derivative contract while identifying basis, quantity, timing and interim-liquidity risk.
How to classify a market: four independent questions
Primary issuance, resale, funding term and execution term are different axes, not mutually exclusive labels.
How to read a financial chart without the illusion of a forecast
Scales, intervals, candles, adjusted series and returns: what a chart shows and what it cannot prove.
Index replication: why a fund can lag the right benchmark
Full and sampled replication, costs, tracking difference and variation in deviations, without ranking funds.
Inflation-indexed bonds: what is actually linked to inflation
Indexation of principal or payment, index lag and purchase price explain why a label does not promise an investor’s personal real return.
Initial margin and variation margin: different monetary roles
An open contract, mark-to-market and account funding explained without assuming that the initial deposit caps the possible loss.
Intermarket and inter-commodity spreads: comparability first
How to compare related commodities and venues, align units and leg sizes, and understand why a historical relationship can break.
Issuer and identifiers: do not confuse a company with an issue
A legal entity, trading code, ISIN and registration number serve different purposes; a shared brand does not prove identical rights.
Leverage and price gaps: how a loss can exceed own funds
Separate the borrowed amount, position value and residual capital after a sharp price move, without assuming guaranteed closing.
Liquidity depth: why the best price is not enough for a large order
Calculate an average execution price across levels, distinguish turnover from available size and understand the limits of a static snapshot.
MACD and RSI: what the indicator transforms and why a signal is not proof
How MACD, its histogram and RSI are constructed, which parameters change the result, and why an extreme value does not promise a reversal.
Market and limit orders: what exactly constrains an instruction
Price, execution probability, partial results and validity period considered separately, without choosing a trading tactic.
Market efficiency: what the hypothesis says about information and price
Which information is assumed to be reflected in price, how to test the efficiency hypothesis and why it does not guarantee fair value.
Markets as complex systems: feedback and the limits of forecasting
How interaction and adaptation change financial systems, and why causal models must be separated from vivid analogies.
Maturity, offer and early call: different events in a bond’s life
How to distinguish the final maturity, a holder’s right to tender a bond and an issuer’s right to end the debt early.
Momentum and reversal: descriptive effects, not entry promises
Distinguish continuation from reversal, preserve the horizon and avoid turning historical effects into trading guarantees.
Moving averages: smoothing, lag and parameter choice
SMA, EMA and weighted averages on one synthetic series, with weights, lag and limits on conclusions from crossings.
Netting and delivery versus payment: two different reductions of settlement risk
Offsetting obligations, cash needs and conditional security delivery explained separately from market performance.
New share issuance: when ownership falls but value does not necessarily
Ownership dilution, new cash received and the change in value per share must be calculated separately.
Option expiry: when the right ends and the money needed to exercise it
Last trading time, exercise style, settlement value and required assets cannot be replaced by one date on a screen.
Option premium: intrinsic value and the price of remaining uncertainty
Why being right about the underlying direction does not guarantee an option profit, and why time value is not a fixed percentage.
Order book: why two best prices exist at the same time
How to read bid and offer sides, absolute and relative spread, and why the last trade is not necessarily an executable price.
OTC transaction: counterparty, price and settlement process
Why OTC does not automatically mean fraud or no clearing, and which questions determine other-side risk.
Power-law distributions: company size, concentration and the limits of extrapolation
How to read a power-law tail and rank distribution, check scale and avoid treating a straight line on a log plot as a law.
Processing spreads: feedstock, product yield and conditional margin
How crack, crush and spark describe different processing models, how to account for product yield and why a price spread is not plant net profit.
Reinvestment risk: why well-known coupons do not fix the final capital
Intermediate money, single future date and unknown rates
Repo: two legs, collateral haircut and the need to provide additional resources
Why transferred securities and financing are linked, but a change in collateral value can create an additional cash need.
Secured and subordinated debt: one “bond” label, different waterfalls
Why collateral, seniority and group position must be checked separately, and why collateral does not guarantee full recovery.
Shares: an interest in a business, rights and uncertain returns
How to distinguish shareholder rights from return expectations, read a worked result and avoid treating a dividend as a guarantee.
Stock splits and reverse splits: what changes in the units of account
How to recalculate quantity and comparable price, separate a corporate action from return and check fractional remnants.
Technical analysis: hypotheses, testing and the limits of evidence
How describing a historical series differs from forecasting, and what must be tested before calling a trading rule useful.
The wisdom of the crowd: when diversity helps and imitation hinders
When pooling scores helps, why is agreement not equal?
Trading frequency: infrastructure and costs across horizons
Which costs change with turnover, how intraday infrastructure differs from a long horizon, and how to test net results.
Volatility, gaps and trading halts: three different events
Why a price can jump across a level, historical variability does not cap a loss and a trading pause does not insure a position.
Volume and open interest: different measures of activity
How contracts traded differ from outstanding obligations, how to calculate open-interest changes and what OBV does not prove.
Why a financial market is needed: capital, liquidity and risk allocation
Primary financing and secondary trading, the role of price and infrastructure, and the limits of the market’s useful functions.
Yield curve: maturities, slope and a conditional forward rate
How to compare like maturities, distinguish coupon yield from spot rates and avoid treating a curve as a forecast.
Zero-coupon bond: return between price and the single payment
How a discount becomes an annual rate, why there are no interim coupons and which risks remain until maturity.
Financial statements
Balance sheets, profit, cash flow and reporting boundaries.
Amortized Cost of Debt: Why Interest Expense Is Different from
Trace the movement of the balance sheet liability between receipts
Balance classification: term, purpose and availability are different questions
Distinguish maturity, liquidity and economic function so payment resources are not overstated.
Balance sheet: what an organization owns and whom it owes
How to distinguish assets, liabilities and equity, read balance-sheet changes and avoid confusing value with available cash.
Business segments: why overall growth can hide a weak division
Read segment sales and results together with reconciliations, internal turnover and changes in group structure.
Cash conversion cycle: how inventory, receivable and payable days connect working capital
Compare the time money is tied up without turning average ratios into a promised payment calendar.
Cash-flow classification: operating, investing and financing without confusion
Analyze the economic substance of receipts and payments instead of treating total cash growth as operating efficiency.
Cash-flow statement: where money came from and where it went
How to separate operating, investing and financing flows and check the link between cash movement and the ending balance.
Complex customer contract: service bundle, price allocation and variable consideration
Read bundled-contract revenue through separate promises and uncertain price, not only the payment calendar.
Consolidated and separate financial statements: where the business boundary lies
Compare results within one perimeter and do not count intra-group turnover as external sales.
Debits, credits and T-accounts: how a transaction preserves balance equality
Follow a journal, account turnovers and closing entries through one fictional workshop.
Debt maturities and covenants: when moderate debt becomes urgent
Compare contractual dates, headroom to limits and available repayment sources without assuming refinancing is guaranteed.
Deferred tax: why tax expense does not equal cash paid
Distinguish current tax, temporary differences and the conditional realisation of a deferred tax asset.
Depreciation methods: time, output and useful-life revisions
Compare cost-allocation schedules under different consumption models without confusing them with tax depreciation.
Earnings quality: repeatability, accruals and reconciliation of adjustments
Test the durability of a result without automatically trusting adjusted earnings or accusing a company on one signal.
Equity method and cross-holdings: do not count income twice
Distinguish control from significant influence, reconcile the investment balance and separate an investor’s own business from interests in other companies.
Equity roll-forward and comprehensive income: why profit does not explain the whole result
Build an equity bridge through profit, owner transactions and other comprehensive income.
Expenses by nature and function: how cost structure changes the reading of profit
Compare expenses and operating leverage without double counting and without assuming that every cost moves with sales.
Financial ratio map: each question needs its own denominator
Distinguish liquidity, turnover, profitability, debt and market price without combining them into a universal assessment.
Financial statement adjustments: correction, estimate or analytical measure
How to distinguish accounting changes from additional measures and test the rationale for each adjustment.
Fixed assets: capital expenditure, maintenance and movements in carrying amount
How to connect the purchase and use of fixed assets with expenses, cash investment and carrying amount.
Goodwill after an acquisition: what remains above identifiable assets
Separate the acquisition price from later operating performance and do not treat goodwill as a cash reserve.
Horizontal and vertical analysis: do not mistake a change of scale for improvement
Align periods and bases, read percentages with absolute changes and flag incomparable data.
How to read financial statements: a beginner’s route
Which questions to ask of the balance sheet, income statement and cash flows, and how to connect the answers.
Impairment: why depreciation is not enough to test an asset’s value
Separate planned allocation of cost from recoverability testing and read cash-generating-unit tests without false precision.
Income statement: from revenue to the period result
How to read profit levels, distinguish expenses from payments and analyse changes without inventing universal norms.
Indirect method: how profit becomes operating cash flow
Check the signs of working-capital changes and do not explain the entire cash flow with depreciation alone.
Intangible assets: value without physical form
Why a useful idea does not always become an accounting asset, and how to read recognition, amortisation and valuation limits.
Inventory and depreciation: when a purchase becomes an expense
How goods held for sale differ from equipment in use, and how both affect results and cash.
Inventory: costing and write-down answer different questions
Do not confuse allocating purchase cost with checking whether the remaining cost can be recovered through sale.
Lease reporting: right of use, debt and comparability
Why lease recognition changes the structure of assets, liabilities and expenses without cancelling contractual payments.
Leverage and payment coverage: an earnings ratio versus cash burden
Distinguish debt structure, interest coverage and the ability to meet the entire calendar of obligations.
Linking the three statements: one transaction in different dimensions
Build a checkable bridge between the balance sheet, profit and cash movement without replacing one statement with another.
Liquidity under stress: why the current ratio is not enough
Move from a static balance sheet to a time-based scenario of available cash and mandatory payments.
Materiality, accrual and going concern: three different reading filters
Do not confuse the size of an error, the recognition period and the assumption that operations continue.
Notes and the audit opinion: read what does not fit in the headline line
Find the limits of reported figures in the notes and understand what an audit opinion does not promise an investor.
Policy, estimate and error: preserve comparability after figures change
How to classify a revision and avoid attributing business growth to a change in the accounting basis.
Profit margin: separate price, volume, mix and costs
How to explain a change in profit margin through economic drivers rather than confusing revenue growth with improved efficiency.
Provisions and contingent obligations: uncertainty does not mean there is no debt
How to distinguish a recognised obligation, a disclosed risk and an analyst’s own scenario.
Receivables: ageing, expected credit losses and sales quality
How to separate gross claims, expected credit-loss estimates and actual collection of receivables.
Related parties: separating ordinary transactions from dependence on the result
How to read turnover and balances with related parties without assuming that every such transaction is unlawful or arm’s length.
Research and development: when costs become an asset and how this affects profit
How to assess development capitalisation without confusing accounting recognition with a project’s economic success.
Revenue recognition: when a sale becomes a result
How to distinguish payment from contract performance and ask when and how much revenue should be recognized.
ROE and the DuPont decomposition: high return on equity does not always mean a strong business
Separate margin, turnover and financing structure while keeping profit and equity on a consistent base.
ROIC and additional capital: average returns do not promise returns on growth
Align operating profit and invested capital, then test the return on new investment separately.
Why profit is not the same as cash
How sales on credit, advance payments and depreciation separate operating results from the cash balance.
Working capital: why resources are not yet cash
How to read the difference between current assets and current liabilities and test its composition and timing.
Valuation and company analysis
Business economics, multiples, discounting and value scenarios.
Allocating capital and teams across segments
Indivisible projects, a limited budget, management capacity and comparison of incremental value rather than revenue.
Business model: what the customer pays for and where cash flow arises
Why “the company operates in a growing market” does not by itself explain the business model.
Capital allocation: compare projects, debt and distributions on one basis
Management uses money through more than dividends; compare alternatives with consistent dates, cash flows and risk.
Competition and cooperation: how others’ decisions change the result
How to build a payoff matrix, distinguish one-off competition from repeated interaction and avoid turning a model equilibrium into a company forecast.
Competitive cycle: why record profit can mean an expensive business
When high profit attracts new capacity, today’s success can create tomorrow’s price pressure.
Corporate governance: who decides, who executes and who checks
Separate owner rights, board oversight and management work, and analyse delegation without abandoning control.
DCF sensitivity and scenarios: do not confuse a table slope with outcome probability
A sensitivity table answers how a result changes when a parameter changes.
Discount rate consistency: align currency, inflation, risk and time
A discount rate is not a decorative cell selected to produce a desired answer.
Discounted cash flows: a model with explicit assumptions
An educational calculation of present value, terminal value and sensitivity without forecasting a real company.
Dividends and total return: do not count the payment apart from price
How to include price change, payments, expenses and reinvestment over a comparable period.
Economic advantage: how to support its strength and duration
The word “brand” does not prove an economic advantage.
EV/EBITDA, leases and replacement equipment: where necessary costs disappear
EV/EBITDA simplifies comparison but does not remove the business’s need for premises, equipment and working resources.
FCFF versus FCFE: identify the cash-flow recipient before choosing the discount rate
Distinguish free cash flow to the firm from free cash flow to equity and keep the recipient, financing and discount rate aligned.
From EV to shareholders: debt, available cash and non-controlling interests
Valuing the operating business is not the same as valuing the parent company’s shares.
Fundamental analysis: test the business story with numbers
A working sequence for reading a business and its reports while separating observations, assumptions and unknowns.
Gordon model: which dividends and growth belong in the formula
Derive D1/(ke−g), test payout sustainability and identify the limits of dividend valuation.
Growth and value: two languages of expectations, not two lists of winners
How to connect development rate with price, investment quality and profit durability without choosing an investment style for the reader.
Insurance float: funding with future obligations
How premiums received before future claims create insurance funding, why float is not profit and how to consider its cost and liquidity.
Investor relations: read disclosure, not the presentation story
Move from an investor presentation to primary disclosure, reconcile KPIs and separate management intentions from achieved results.
Management and incentives: what the system rewards
Compare compensation metrics, share ownership and resource allocation without the myth of one ideal manager.
Margin of safety: a discount does not insure against model error
Why the gap between estimated value and price is conditional on the model, not a universal safe-buying percentage.
Market capitalization and multiples: compare the right quantities
How to distinguish equity value from business value, choose a ratio denominator and test the limits of the comparison.
Negative P/E: why loss-making companies cannot be ranked on the usual scale
Negative P/E is the quotient of a positive price and negative earnings per share; the familiar “lower is cheaper” rule loses meaning.
P/B: why book cheapness means different things for a bank and a manufacturer
How the price-to-book ratio links market equity value with accounting equity, and why sector, asset quality and future returns matter.
P/S and EV/Sales: revenue is shared, residual rights differ
Why equal sales do not make companies equally cheap: debt, margin and capital needs.
Peer comparison: comparability first, median second
How to build a fair comparison group and detect differences in dates, earnings, debt and business structure.
Reverse valuation: what growth and margin are already priced in
How to invert a valuation model and distinguish a price’s conditional requirements from a single market forecast.
ROIC versus WACC: growth creates value only with sufficient return
Compare operating return with the required return on capital, while separating mature assets from incremental investment.
Terminal value: perpetual growth and exit multiple answer different questions
Why the end of a detailed forecast is not the end of a business, and how to keep continuation assumptions visible.
Trailing, forward and normalized EPS: three different P/E bases
Why two services can show different P/E ratios at the same price because they divide by different earnings measures.
Unit economics: a profitable order does not yet mean a profitable customer
Unit economics examines revenue and costs for a chosen business unit.
Valuation range: how to communicate uncertainty without inventing a confidence interval
Price is an observable exchange condition at a particular time and size; value is a model conclusion under stated assumptions.
Value per customer or megawatt: checking an industry denominator
How to use valuation units without treating registration as a customer or capacity as cash flow.
Portfolio
Risk, diversification, rebalancing and investor behaviour.
Backtest overfitting: how many attempts hide behind one beautiful curve
A beautiful historical curve may be the winner of thousands of random variants.
Correlation and covariance: why the result depends on the scale and window of the data
Correlation describes the linear joint movement of two series
Currency prices, cash flows and country of risk
One fictitious company: revenue and debt currencies, quote
Diversification: look for independent causes, not just names
How to find hidden concentration and understand the limits of spreading risk through fictional examples.
Expected value in decisions: probability and outcome size
Account for probability and outcome size, test decision robustness and avoid confusing positive expectation with acceptable risk.
Factor exposure: explaining returns is not promising a risk premium
A factor model describes joint return movements through selected risk sources or statistical characteristics.
Fat tails: why rare losses cannot be removed by an average
Why standard deviation does not describe all risk and how to build a rare-loss scenario without inventing a precise probability.
Financial records: prepare the data without guessing the tax
Keep a transaction journal and supporting documents while separating financial arithmetic from jurisdiction-specific tax conclusions.
Forecast calibration: assess probability, not confident tone
How to record testable probabilistic forecasts, calculate the Brier score and distinguish calibration from informativeness.
Housing: the service of living, credit and comparison with renting
Model a mortgage, repairs, utility, concentration and liquidity without choosing housing for the reader.
Index and active approaches: compare implementation cost and purpose, not labels
An index approach seeks to reproduce a chosen benchmark; an active approach departs from it for its own purpose.
Martingale and position increases: why a loss need not recover
How doubling after a loss differs from planned contributions, and why lowering average price does not remove capital risk.
Mean reversion and extrapolation: test the mechanism, not the shape of the series
Distinguish statistical regression to the mean, an economic recovery mechanism and an irreversible regime change.
Portfolio objectives and liabilities: build the spending calendar before choosing asset risk
How to evaluate a portfolio against future payments, dates, currencies, access and funding gaps rather than return alone.
Portfolio risk: losses, horizons and co-movement
How to separate price fluctuation from unacceptable consequences and read educational stress scenarios without turning them into personal advice.
Position sizing: measure the contribution of error, not confidence in the story
Position size translates the error of analysing one asset into consequences for the whole portfolio.
Purchase price as an anchor: test the thesis instead of defending the old decision
Why an entry price can distort analysis through anchoring, loss aversion and confirmation seeking.
Rebalancing and behaviour: restore the rule, not a market guess
How to distinguish restoring an educational structure from changing the objective, compare methods and account for costs.
Returns with contributions: money-weighted and time-weighted results
Why two correct percentages for one account can answer different questions.
Sequence of returns: why equal percentages leave different balances with withdrawals
Average return does not fully describe the outcome of a portfolio with regular withdrawals.
Survivors and future knowledge: two errors that quietly improve a backtest
A historical test can be mathematically correct and still describe an impossible strategy.
The cost of rebalancing: turnover, spread and expenses matter more than elegant frequency
Rebalancing restores a rule, but every transaction has a price.
Verifying a financial source: date, scope and reproducibility
How to build a financial-evidence card, check dates and scope and explain a mismatch between two published figures.
Volatility and drawdown: identical changes can produce different loss paths
Volatility measures return dispersion; drawdown measures the fall from a previous peak along a chosen path.
When IRR misleads: multiple roots, no solution and the wrong scale
Treat internal rate of return as an equation solution, not a universal measure of attractiveness.