All I want to know is where I’ll die so I’ll never go there –Charlie Munger

Briefly successful during a four year period of the 90’s, Long-term Capital Management (LTCM) was anything but. LTCM speculated on over a trillion dollars worth of assets with only a few billion of capital, bringing on its spectacular collapse in 1998. So maybe you’re better off naming yourself the opposite of your intentions.

Today’s finance and personal finance, just looking at the parts of it not contaminated with fraud and outrageous fees, mostly fits a strategy like “put money in diversified stock and bond index funds at a proportion according to your age and retirement goals.” That works well– so well that this blog will often stick to something like it. But, too much published theory misses the mark in applying concepts like “volatility,” “risk” and historical returns to real-world predictions about the future and its effects on your portfolio. Not only that, but to borrow from Abraham Lincoln, all of the marketable securities cannot be perfectly efficient all of the times.

With “Capricious Capital,” I recognize that a diversification and indexing strategy should form the basis of investing most of the time. But occasionally markets do strange things, and you, the reader, should be prepared to jump on those opportunities.

Ultimately, our investment strategy requires equanimity– having the stomach to stick to your well-reasoned strategy. That’s helped by thinking about the capricious path, and not going there.